Correlation Between Vy Invesco and Voya Limited

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

By analyzing existing cross correlation between Vy Invesco Equity and Voya Limited Maturity, you can compare the effects of market volatilities on Vy Invesco and Voya Limited 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 Invesco with a short position of Voya Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vy Invesco and Voya Limited.

Diversification Opportunities for Vy Invesco and Voya Limited

0.34

Correlation Coefficient

Vy Invesco  Voya Limited

Weak diversification

The 3 months correlation between IVIPX and Voya is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vy Invesco Equity and Voya Limited Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Limited Maturity and Vy Invesco 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 Invesco Equity are associated (or correlated) with Voya Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Limited Maturity has no effect on the direction of Vy Invesco i.e., Vy Invesco and Voya Limited go up and down completely randomly.

Pair Corralation between Vy Invesco and Voya Limited

Assuming the 90 days horizon Vy Invesco Equity is expected to under-perform the Voya Limited. In addition to that, Vy Invesco is 5.68 times more volatile than Voya Limited Maturity. It trades about -0.1 of its total potential returns per unit of risk. Voya Limited Maturity is currently generating about 0.16 per unit of volatility. If you would invest  951.00  in Voya Limited Maturity on December 11, 2024 and sell it today you would earn a total of  10.00  from holding Voya Limited Maturity or generate 1.05% return on investment over 90 days.

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

Vy Invesco Equity  vs.  Voya Limited Maturity

Vy Invesco Equity

Risk-Adjusted Performance

Very Weak

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

Voya Limited Maturity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Limited Maturity are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Voya Limited is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vy Invesco and Voya Limited

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

The idea behind Vy Invesco Equity and Voya Limited Maturity 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.