Correlation Between Voya Midcap and Vy T

Can any of the company-specific risk be diversified away by investing in both Voya Midcap and Vy T 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 Vy T 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 Vy T Rowe, you can compare the effects of market volatilities on Voya Midcap and Vy T 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 Vy T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Midcap and Vy T.

Diversification Opportunities for Voya Midcap and Vy T

0.9

Correlation Coefficient

Voya Midcap  Vy T

Almost no diversification

The 3 months correlation between Voya and IAXIX is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Voya Midcap Opportunities and Vy T Rowe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy T Rowe 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 Vy T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy T Rowe has no effect on the direction of Voya Midcap i.e., Voya Midcap and Vy T go up and down completely randomly.

Pair Corralation between Voya Midcap and Vy T

Assuming the 90 days horizon Voya Midcap Opportunities is expected to under-perform the Vy T. In addition to that, Voya Midcap is 1.86 times more volatile than Vy T Rowe. It trades about -0.18 of its total potential returns per unit of risk. Vy T Rowe is currently generating about -0.08 per unit of volatility. If you would invest  1,178  in Vy T Rowe on September 21, 2024 and sell it today you would lose (28.00) from holding Vy T Rowe or give up 2.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.45%
Values	Daily Returns

Voya Midcap Opportunities  vs.  Vy T Rowe

Voya Midcap Opportunities

Risk-Adjusted Performance

0 of 100

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 fairly strong basic indicators, Voya Midcap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vy T Rowe

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vy T Rowe are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Vy T may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Voya Midcap and Vy T

The main advantage of trading using opposite Voya Midcap and Vy T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Midcap position performs unexpectedly, Vy T 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 Vy T will offset losses from the drop in Vy T's long position.

The idea behind Voya Midcap Opportunities and Vy T Rowe 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.