Correlation Between Voya Multi and Voya Large

Can any of the company-specific risk be diversified away by investing in both Voya Multi and Voya Large at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Voya Multi and Voya Large into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Voya Multi Manager Mid and Voya Large Cap, you can compare the effects of market volatilities on Voya Multi and Voya Large and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Voya Multi with a short position of Voya Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Multi and Voya Large.

Diversification Opportunities for Voya Multi and Voya Large

-0.32

Correlation Coefficient

Voya Multi  Voya Large

Very good diversification

The 3 months correlation between Voya and Voya is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Voya Multi Manager Mid and Voya Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap and Voya Multi is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Voya Multi Manager Mid are associated (or correlated) with Voya Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Voya Multi i.e., Voya Multi and Voya Large go up and down completely randomly.

Pair Corralation between Voya Multi and Voya Large

Assuming the 90 days horizon Voya Multi is expected to generate 14.03 times less return on investment than Voya Large. But when comparing it to its historical volatility, Voya Multi Manager Mid is 1.1 times less risky than Voya Large. It trades about 0.01 of its potential returns per unit of risk. Voya Large Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  985.00  in Voya Large Cap on September 27, 2024 and sell it today you would earn a total of  774.00  from holding Voya Large Cap or generate 78.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Voya Multi Manager Mid  vs.  Voya Large Cap

Voya Multi Manager

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Multi Manager Mid has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Voya Large Cap

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Large Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Voya Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Voya Multi and Voya Large

The main advantage of trading using opposite Voya Multi and Voya Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Multi position performs unexpectedly, Voya Large can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Voya Large will offset losses from the drop in Voya Large's long position.

The idea behind Voya Multi Manager Mid and Voya Large Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.