Correlation Between Voya Intermediate and Voya Investment

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

By analyzing existing cross correlation between Voya Intermediate Bond and Voya Investment Grade, you can compare the effects of market volatilities on Voya Intermediate and Voya Investment 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 Intermediate with a short position of Voya Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Intermediate and Voya Investment.

Diversification Opportunities for Voya Intermediate and Voya Investment

0.97

Correlation Coefficient

Voya Intermediate  Voya Investment

Almost no diversification

The 3 months correlation between Voya and Voya is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Voya Intermediate Bond and Voya Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Investment Grade and Voya Intermediate 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 Intermediate Bond are associated (or correlated) with Voya Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Investment Grade has no effect on the direction of Voya Intermediate i.e., Voya Intermediate and Voya Investment go up and down completely randomly.

Pair Corralation between Voya Intermediate and Voya Investment

Assuming the 90 days horizon Voya Intermediate Bond is expected to under-perform the Voya Investment. But the mutual fund apears to be less risky and, when comparing its historical volatility, Voya Intermediate Bond is 1.11 times less risky than Voya Investment. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Voya Investment Grade is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  929.00  in Voya Investment Grade on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Voya Investment Grade or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Voya Intermediate Bond  vs.  Voya Investment Grade

Voya Intermediate Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Intermediate Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Voya Intermediate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Investment Grade

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Investment Grade has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Voya Investment 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 Intermediate and Voya Investment

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

The idea behind Voya Intermediate Bond and Voya Investment Grade 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.