Correlation Between Vy(r) T and Voya Vacs

Can any of the company-specific risk be diversified away by investing in both Vy(r) T and Voya Vacs 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 Vy(r) T and Voya Vacs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vy T Rowe and Voya Vacs Index, you can compare the effects of market volatilities on Vy(r) T and Voya Vacs 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 Vy(r) T with a short position of Voya Vacs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vy(r) T and Voya Vacs.

Diversification Opportunities for Vy(r) T and Voya Vacs

0.96

Correlation Coefficient

Vy(r) T  Voya Vacs

Almost no diversification

The 3 months correlation between Vy(r) and Voya is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Vy T Rowe and Voya Vacs Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Vacs Index and Vy(r) T 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 Vy T Rowe are associated (or correlated) with Voya Vacs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Vacs Index has no effect on the direction of Vy(r) T i.e., Vy(r) T and Voya Vacs go up and down completely randomly.

Pair Corralation between Vy(r) T and Voya Vacs

Assuming the 90 days horizon Vy T Rowe is expected to under-perform the Voya Vacs. In addition to that, Vy(r) T is 1.2 times more volatile than Voya Vacs Index. It trades about -0.09 of its total potential returns per unit of risk. Voya Vacs Index is currently generating about -0.09 per unit of volatility. If you would invest  1,186  in Voya Vacs Index on December 28, 2024 and sell it today you would lose (84.00) from holding Voya Vacs Index or give up 7.08% of portfolio value over 90 days.

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

Vy T Rowe  vs.  Voya Vacs Index

Vy T Rowe

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vy T Rowe has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Voya Vacs Index

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Vy(r) T and Voya Vacs

The main advantage of trading using opposite Vy(r) T and Voya Vacs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vy(r) T position performs unexpectedly, Voya Vacs 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 Vacs will offset losses from the drop in Voya Vacs' long position.

The idea behind Vy T Rowe and Voya Vacs Index 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.