Correlation Between Voya Midcap and Vy Baron

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

Diversification Opportunities for Voya Midcap and Vy Baron

0.77

Correlation Coefficient

Voya Midcap  Vy Baron

Poor diversification

The 3 months correlation between Voya and IBSAX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Voya Midcap Opportunities and Vy Baron Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Baron Growth 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 Baron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Baron Growth has no effect on the direction of Voya Midcap i.e., Voya Midcap and Vy Baron go up and down completely randomly.

Pair Corralation between Voya Midcap and Vy Baron

Assuming the 90 days horizon Voya Midcap Opportunities is expected to generate 1.2 times more return on investment than Vy Baron. However, Voya Midcap is 1.2 times more volatile than Vy Baron Growth. It trades about 0.04 of its potential returns per unit of risk. Vy Baron Growth is currently generating about 0.03 per unit of risk. If you would invest  2,313  in Voya Midcap Opportunities on September 14, 2024 and sell it today you would earn a total of  264.00  from holding Voya Midcap Opportunities or generate 11.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.6%
Values	Daily Returns

Voya Midcap Opportunities  vs.  Vy Baron Growth

Voya Midcap Opportunities

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Midcap Opportunities are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Voya Midcap may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vy Baron Growth

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vy Baron Growth are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vy Baron is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Voya Midcap and Vy Baron

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

The idea behind Voya Midcap Opportunities and Vy Baron Growth 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.