Correlation Between Voya Midcap and Voya Midcap

Can any of the company-specific risk be diversified away by investing in both Voya Midcap and Voya Midcap 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 Midcap and Voya Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Voya Midcap Opportunities and Voya Midcap Opportunities, you can compare the effects of market volatilities on Voya Midcap and Voya Midcap 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 Midcap with a short position of Voya Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Midcap and Voya Midcap.

Diversification Opportunities for Voya Midcap and Voya Midcap

1.0

Correlation Coefficient

Voya Midcap  Voya Midcap

No risk reduction

The 3 months correlation between Voya and Voya is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Voya Midcap Opportunities and Voya Midcap Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Midcap Opportunities and Voya Midcap 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 Midcap Opportunities are associated (or correlated) with Voya Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Midcap Opportunities has no effect on the direction of Voya Midcap i.e., Voya Midcap and Voya Midcap go up and down completely randomly.

Pair Corralation between Voya Midcap and Voya Midcap

Assuming the 90 days horizon Voya Midcap Opportunities is expected to under-perform the Voya Midcap. But the mutual fund apears to be less risky and, when comparing its historical volatility, Voya Midcap Opportunities is 1.01 times less risky than Voya Midcap. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Voya Midcap Opportunities is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  1,687  in Voya Midcap Opportunities on December 28, 2024 and sell it today you would lose (126.00) from holding Voya Midcap Opportunities or give up 7.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Voya Midcap Opportunities  vs.  Voya Midcap Opportunities

Voya Midcap Opportunities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voya Midcap Opportunities 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 Midcap Opportunities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voya Midcap Opportunities 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.

Pair Trading with Voya Midcap and Voya Midcap

The main advantage of trading using opposite Voya Midcap and Voya Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Midcap position performs unexpectedly, Voya Midcap 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 Midcap will offset losses from the drop in Voya Midcap's long position.

The idea behind Voya Midcap Opportunities and Voya Midcap Opportunities 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.