Correlation Between Voya Stock and Vy(r) Franklin
Can any of the company-specific risk be diversified away by investing in both Voya Stock and Vy(r) Franklin 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 Stock and Vy(r) Franklin 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 Vy Franklin Income, you can compare the effects of market volatilities on Voya Stock and Vy(r) Franklin 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 Stock with a short position of Vy(r) Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Stock and Vy(r) Franklin.
Diversification Opportunities for Voya Stock and Vy(r) Franklin
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Voya and Vy(r) is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Voya Stock Index and Vy Franklin Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Franklin Income and Voya Stock 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 Vy(r) Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Franklin Income has no effect on the direction of Voya Stock i.e., Voya Stock and Vy(r) Franklin go up and down completely randomly.
Pair Corralation between Voya Stock and Vy(r) Franklin
Assuming the 90 days horizon Voya Stock Index is expected to generate 2.66 times more return on investment than Vy(r) Franklin. However, Voya Stock is 2.66 times more volatile than Vy Franklin Income. It trades about 0.05 of its potential returns per unit of risk. Vy Franklin Income is currently generating about 0.12 per unit of risk. If you would invest 1,620 in Voya Stock Index on October 4, 2024 and sell it today you would earn a total of 407.00 from holding Voya Stock Index or generate 25.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Voya Stock Index vs. Vy Franklin Income
Performance |
Timeline |
Voya Stock Index |
Vy Franklin Income |
Voya Stock and Vy(r) Franklin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Voya Stock and Vy(r) Franklin
The main advantage of trading using opposite Voya Stock and Vy(r) Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Stock position performs unexpectedly, Vy(r) Franklin 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(r) Franklin will offset losses from the drop in Vy(r) Franklin's long position.Voya Stock vs. Voya Bond Index | Voya Stock vs. Voya Bond Index | Voya Stock vs. Voya Limited Maturity | Voya Stock vs. Voya Limited Maturity |
Vy(r) Franklin vs. Voya Bond Index | Vy(r) Franklin vs. Voya Bond Index | Vy(r) Franklin vs. Voya Limited Maturity | Vy(r) Franklin vs. Voya Limited Maturity |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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