Correlation Between Voya High and Gold Bullion
Can any of the company-specific risk be diversified away by investing in both Voya High and Gold Bullion 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 Gold Bullion 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 The Gold Bullion, you can compare the effects of market volatilities on Voya High and Gold Bullion 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 Gold Bullion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Gold Bullion.
Diversification Opportunities for Voya High and Gold Bullion
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and Gold is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and The Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bullion 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 Gold Bullion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bullion has no effect on the direction of Voya High i.e., Voya High and Gold Bullion go up and down completely randomly.
Pair Corralation between Voya High and Gold Bullion
Assuming the 90 days horizon Voya High is expected to generate 14.62 times less return on investment than Gold Bullion. But when comparing it to its historical volatility, Voya High Yield is 4.37 times less risky than Gold Bullion. It trades about 0.09 of its potential returns per unit of risk. The Gold Bullion is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,963 in The Gold Bullion on December 18, 2024 and sell it today you would earn a total of 322.00 from holding The Gold Bullion or generate 16.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Voya High Yield vs. The Gold Bullion
Performance |
Timeline |
Voya High Yield |
Gold Bullion |
Voya High and Gold Bullion Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Voya High and Gold Bullion
The main advantage of trading using opposite Voya High and Gold Bullion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High position performs unexpectedly, Gold Bullion 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 Gold Bullion will offset losses from the drop in Gold Bullion's long position.Voya High vs. T Rowe Price | Voya High vs. Mutual Of America | Voya High vs. T Rowe Price | Voya High vs. Vanguard Mid Cap Index |
Gold Bullion vs. Gmo E Plus | Gold Bullion vs. Ishares Aggregate Bond | Gold Bullion vs. Ab Bond Inflation | Gold Bullion vs. Ashmore Emerging Markets |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
Transaction History View history of all your transactions and understand their impact on performance | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |