Correlation Between Edward Jones and Voya Large-cap

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

By analyzing existing cross correlation between Edward Jones Money and Voya Large Cap Growth, you can compare the effects of market volatilities on Edward Jones and Voya Large-cap 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 Edward Jones with a short position of Voya Large-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edward Jones and Voya Large-cap.

Diversification Opportunities for Edward Jones and Voya Large-cap

0.0

Correlation Coefficient

Edward Jones  Voya Large-cap

Pay attention - limited upside

The 3 months correlation between Edward and Voya is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Edward Jones Money and Voya Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap and Edward Jones 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 Edward Jones Money are associated (or correlated) with Voya Large-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Edward Jones i.e., Edward Jones and Voya Large-cap go up and down completely randomly.

Pair Corralation between Edward Jones and Voya Large-cap

Assuming the 90 days horizon Edward Jones Money is expected to generate 14.21 times more return on investment than Voya Large-cap. However, Edward Jones is 14.21 times more volatile than Voya Large Cap Growth. It trades about 0.03 of its potential returns per unit of risk. Voya Large Cap Growth is currently generating about 0.11 per unit of risk. If you would invest  95.00  in Edward Jones Money on October 4, 2024 and sell it today you would earn a total of  5.00  from holding Edward Jones Money or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.0%
Values	Daily Returns

Edward Jones Money  vs.  Voya Large Cap Growth

Edward Jones Money

Risk-Adjusted Performance

0 of 100

Very Weak

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

Voya Large Cap

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Large Cap Growth are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Voya Large-cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Edward Jones and Voya Large-cap

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

The idea behind Edward Jones Money and Voya Large Cap Growth 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.