Correlation Between Voya Us and 694308KB2

Can any of the company-specific risk be diversified away by investing in both Voya Us and 694308KB2 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 694308KB2 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 PCG 42 01 MAR 29, you can compare the effects of market volatilities on Voya Us and 694308KB2 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 694308KB2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Us and 694308KB2.

Diversification Opportunities for Voya Us and 694308KB2

0.02

Correlation Coefficient

Voya Us  694308KB2

Significant diversification

The 3 months correlation between Voya and 694308KB2 is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Voya Stock Index and PCG 42 01 MAR 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCG 42 01 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 694308KB2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCG 42 01 has no effect on the direction of Voya Us i.e., Voya Us and 694308KB2 go up and down completely randomly.

Pair Corralation between Voya Us and 694308KB2

Assuming the 90 days horizon Voya Stock Index is expected to under-perform the 694308KB2. But the mutual fund apears to be less risky and, when comparing its historical volatility, Voya Stock Index is 1.81 times less risky than 694308KB2. The mutual fund trades about -0.13 of its potential returns per unit of risk. The PCG 42 01 MAR 29 is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  9,713  in PCG 42 01 MAR 29 on December 11, 2024 and sell it today you would lose (234.00) from holding PCG 42 01 MAR 29 or give up 2.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.22%
Values	Daily Returns

Voya Stock Index  vs.  PCG 42 01 MAR 29

Voya Stock Index

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voya Stock Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

PCG 42 01

Risk-Adjusted Performance

Very Weak

Over the last 90 days PCG 42 01 MAR 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 694308KB2 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Voya Us and 694308KB2

The main advantage of trading using opposite Voya Us and 694308KB2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Us position performs unexpectedly, 694308KB2 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 694308KB2 will offset losses from the drop in 694308KB2's long position.

The idea behind Voya Stock Index and PCG 42 01 MAR 29 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.