Correlation Between Multisector Bond and Voya Solution

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Can any of the company-specific risk be diversified away by investing in both Multisector Bond and Voya Solution 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 Multisector Bond and Voya Solution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multisector Bond Sma and Voya Solution Aggressive, you can compare the effects of market volatilities on Multisector Bond and Voya Solution 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 Multisector Bond with a short position of Voya Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and Voya Solution.

Diversification Opportunities for Multisector Bond and Voya Solution

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Multisector and Voya is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma and Voya Solution Aggressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Solution Aggressive and Multisector Bond 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 Multisector Bond Sma are associated (or correlated) with Voya Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Solution Aggressive has no effect on the direction of Multisector Bond i.e., Multisector Bond and Voya Solution go up and down completely randomly.

Pair Corralation between Multisector Bond and Voya Solution

Assuming the 90 days horizon Multisector Bond Sma is expected to generate 0.41 times more return on investment than Voya Solution. However, Multisector Bond Sma is 2.46 times less risky than Voya Solution. It trades about 0.09 of its potential returns per unit of risk. Voya Solution Aggressive is currently generating about 0.03 per unit of risk. If you would invest  1,353  in Multisector Bond Sma on October 22, 2024 and sell it today you would earn a total of  7.00  from holding Multisector Bond Sma or generate 0.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Multisector Bond Sma  vs.  Voya Solution Aggressive

 Performance 
       Timeline  
Multisector Bond Sma 

Risk-Adjusted Performance

4 of 100

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

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Voya Solution Aggressive are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Voya Solution is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Multisector Bond and Voya Solution Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Multisector Bond and Voya Solution

The main advantage of trading using opposite Multisector Bond and Voya Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond position performs unexpectedly, Voya Solution 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 Solution will offset losses from the drop in Voya Solution's long position.
The idea behind Multisector Bond Sma and Voya Solution Aggressive 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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