Correlation Between Voya High and Community Reinvestment

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

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

Diversification Opportunities for Voya High and Community Reinvestment

-0.19

Correlation Coefficient

Voya High  Community Reinvestment

Good diversification

The 3 months correlation between Voya and Community is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Community Reinvestment Act in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Reinvestment and Voya High 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 High Yield are associated (or correlated) with Community Reinvestment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Reinvestment has no effect on the direction of Voya High i.e., Voya High and Community Reinvestment go up and down completely randomly.

Pair Corralation between Voya High and Community Reinvestment

Assuming the 90 days horizon Voya High Yield is expected to generate 0.63 times more return on investment than Community Reinvestment. However, Voya High Yield is 1.6 times less risky than Community Reinvestment. It trades about 0.15 of its potential returns per unit of risk. Community Reinvestment Act is currently generating about -0.08 per unit of risk. If you would invest  691.00  in Voya High Yield on September 12, 2024 and sell it today you would earn a total of  10.00  from holding Voya High Yield or generate 1.45% return on investment over 90 days.

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

Voya High Yield  vs.  Community Reinvestment Act

Voya High Yield

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Voya High Yield are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Voya High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Community Reinvestment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Community Reinvestment Act has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Community Reinvestment 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 High and Community Reinvestment

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

The idea behind Voya High Yield and Community Reinvestment Act 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.