Correlation Between Mid-cap Value and Voya Balanced

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

By analyzing existing cross correlation between Mid Cap Value Profund and Voya Balanced Portfolio, you can compare the effects of market volatilities on Mid-cap Value and Voya Balanced 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 Mid-cap Value with a short position of Voya Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid-cap Value and Voya Balanced.

Diversification Opportunities for Mid-cap Value and Voya Balanced

0.17

Correlation Coefficient

Mid-cap Value  Voya Balanced

Average diversification

The 3 months correlation between Mid-cap and Voya is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Value Profund and Voya Balanced Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Balanced Portfolio and Mid-cap Value 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 Mid Cap Value Profund are associated (or correlated) with Voya Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Balanced Portfolio has no effect on the direction of Mid-cap Value i.e., Mid-cap Value and Voya Balanced go up and down completely randomly.

Pair Corralation between Mid-cap Value and Voya Balanced

Assuming the 90 days horizon Mid Cap Value Profund is expected to generate 1.57 times more return on investment than Voya Balanced. However, Mid-cap Value is 1.57 times more volatile than Voya Balanced Portfolio. It trades about 0.03 of its potential returns per unit of risk. Voya Balanced Portfolio is currently generating about 0.03 per unit of risk. If you would invest  7,838  in Mid Cap Value Profund on October 4, 2024 and sell it today you would earn a total of  1,046  from holding Mid Cap Value Profund or generate 13.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	76.36%
Values	Daily Returns

Mid Cap Value Profund  vs.  Voya Balanced Portfolio

Mid Cap Value

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap Value Profund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mid-cap Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Balanced Portfolio

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mid-cap Value and Voya Balanced

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

The idea behind Mid Cap Value Profund and Voya Balanced Portfolio 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.