Correlation Between Voya High and Parametric Commodity
Can any of the company-specific risk be diversified away by investing in both Voya High and Parametric Commodity 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 Parametric Commodity 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 Parametric Modity Strategy, you can compare the effects of market volatilities on Voya High and Parametric Commodity 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 Parametric Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Parametric Commodity.
Diversification Opportunities for Voya High and Parametric Commodity
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and PARAMETRIC is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Parametric Modity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parametric Commodity 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 Parametric Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parametric Commodity has no effect on the direction of Voya High i.e., Voya High and Parametric Commodity go up and down completely randomly.
Pair Corralation between Voya High and Parametric Commodity
Assuming the 90 days horizon Voya High Yield is expected to generate 0.26 times more return on investment than Parametric Commodity. However, Voya High Yield is 3.85 times less risky than Parametric Commodity. It trades about 0.1 of its potential returns per unit of risk. Parametric Modity Strategy is currently generating about -0.1 per unit of risk. If you would invest 696.00 in Voya High Yield on December 4, 2024 and sell it today you would earn a total of 2.00 from holding Voya High Yield or generate 0.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Voya High Yield vs. Parametric Modity Strategy
Performance |
Timeline |
Voya High Yield |
Parametric Commodity |
Voya High and Parametric Commodity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Voya High and Parametric Commodity
The main advantage of trading using opposite Voya High and Parametric Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High position performs unexpectedly, Parametric Commodity 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 Parametric Commodity will offset losses from the drop in Parametric Commodity's long position.Voya High vs. Hennessy Bp Energy | Voya High vs. Salient Mlp Energy | Voya High vs. Fidelity Advisor Energy | Voya High vs. Oil Gas Ultrasector |
Parametric Commodity vs. Vy Goldman Sachs | Parametric Commodity vs. Global Gold Fund | Parametric Commodity vs. World Precious Minerals | Parametric Commodity vs. Deutsche Gold Precious |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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