Correlation Between Voya High and Fidelity Capital
Can any of the company-specific risk be diversified away by investing in both Voya High and Fidelity Capital 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 Fidelity Capital 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 Fidelity Capital Income, you can compare the effects of market volatilities on Voya High and Fidelity Capital 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 Fidelity Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Fidelity Capital.
Diversification Opportunities for Voya High and Fidelity Capital
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and Fidelity is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Fidelity Capital Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Capital Income 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 Fidelity Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Capital Income has no effect on the direction of Voya High i.e., Voya High and Fidelity Capital go up and down completely randomly.
Pair Corralation between Voya High and Fidelity Capital
Assuming the 90 days horizon Voya High is expected to generate 2.72 times less return on investment than Fidelity Capital. But when comparing it to its historical volatility, Voya High Yield is 2.18 times less risky than Fidelity Capital. It trades about 0.12 of its potential returns per unit of risk. Fidelity Capital Income is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,030 in Fidelity Capital Income on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Fidelity Capital Income or generate 0.78% 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. Fidelity Capital Income
Performance |
Timeline |
Voya High Yield |
Fidelity Capital Income |
Voya High and Fidelity Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Voya High and Fidelity Capital
The main advantage of trading using opposite Voya High and Fidelity Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High position performs unexpectedly, Fidelity Capital 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 Fidelity Capital will offset losses from the drop in Fidelity Capital's long position.Voya High vs. SCOR PK | Voya High vs. Morningstar Unconstrained Allocation | Voya High vs. Via Renewables | Voya High vs. Bondbloxx ETF Trust |
Fidelity Capital vs. Vanguard High Yield Corporate | Fidelity Capital vs. Vanguard High Yield Porate | Fidelity Capital vs. Blackrock Hi Yld | Fidelity Capital vs. Blackrock High Yield |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |