Correlation Between Voya Us and Artisan Small

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

By analyzing existing cross correlation between Voya Stock Index and Artisan Small Cap, you can compare the effects of market volatilities on Voya Us and Artisan Small 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 Us with a short position of Artisan Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Us and Artisan Small.

Diversification Opportunities for Voya Us and Artisan Small

0.45

Correlation Coefficient

Voya Us  Artisan Small

Very weak diversification

The 3 months correlation between Voya and Artisan is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Voya Stock Index and Artisan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Small Cap and Voya Us 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 Stock Index are associated (or correlated) with Artisan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Small Cap has no effect on the direction of Voya Us i.e., Voya Us and Artisan Small go up and down completely randomly.

Pair Corralation between Voya Us and Artisan Small

Assuming the 90 days horizon Voya Us is expected to generate 3.49 times less return on investment than Artisan Small. But when comparing it to its historical volatility, Voya Stock Index is 1.35 times less risky than Artisan Small. It trades about 0.08 of its potential returns per unit of risk. Artisan Small Cap is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3,583  in Artisan Small Cap on October 24, 2024 and sell it today you would earn a total of  162.00  from holding Artisan Small Cap or generate 4.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Voya Stock Index  vs.  Artisan Small Cap

Voya Stock Index

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Stock Index are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Voya Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Artisan Small Cap

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Small Cap are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Small 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 Us and Artisan Small

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

The idea behind Voya Stock Index and Artisan Small Cap 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.