Correlation Between Voya Gnma and Vanguard Gnma

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

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

Diversification Opportunities for Voya Gnma and Vanguard Gnma

0.43

Correlation Coefficient

Voya Gnma  Vanguard Gnma

Very weak diversification

The 3 months correlation between Voya and Vanguard is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Voya Gnma Income and Vanguard Gnma Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Gnma and Voya Gnma 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 Gnma Income are associated (or correlated) with Vanguard Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Gnma has no effect on the direction of Voya Gnma i.e., Voya Gnma and Vanguard Gnma go up and down completely randomly.

Pair Corralation between Voya Gnma and Vanguard Gnma

Assuming the 90 days horizon Voya Gnma Income is expected to under-perform the Vanguard Gnma. But the mutual fund apears to be less risky and, when comparing its historical volatility, Voya Gnma Income is 1.01 times less risky than Vanguard Gnma. The mutual fund trades about -0.49 of its potential returns per unit of risk. The Vanguard Gnma Fund is currently generating about -0.43 of returns per unit of risk over similar time horizon. If you would invest  929.00  in Vanguard Gnma Fund on October 9, 2024 and sell it today you would lose (20.00) from holding Vanguard Gnma Fund or give up 2.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Voya Gnma Income  vs.  Vanguard Gnma Fund

Voya Gnma Income

Risk-Adjusted Performance

0 of 100

Very Weak

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

Vanguard Gnma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Gnma Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking indicators, Vanguard Gnma 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 Gnma and Vanguard Gnma

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

The idea behind Voya Gnma Income and Vanguard Gnma Fund 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.