Correlation Between Voya Multi-manager and Jpmorgan Small

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

By analyzing existing cross correlation between Voya Multi Manager International and Jpmorgan Small Cap, you can compare the effects of market volatilities on Voya Multi-manager and Jpmorgan Small 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 Multi-manager with a short position of Jpmorgan Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Multi-manager and Jpmorgan Small.

Diversification Opportunities for Voya Multi-manager and Jpmorgan Small

-0.02

Correlation Coefficient

Voya Multi-manager  Jpmorgan Small

Good diversification

The 3 months correlation between Voya and JPMORGAN is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Voya Multi Manager Internation and Jpmorgan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Small Cap and Voya Multi-manager 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 Multi Manager International are associated (or correlated) with Jpmorgan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Small Cap has no effect on the direction of Voya Multi-manager i.e., Voya Multi-manager and Jpmorgan Small go up and down completely randomly.

Pair Corralation between Voya Multi-manager and Jpmorgan Small

Assuming the 90 days horizon Voya Multi Manager International is expected to under-perform the Jpmorgan Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Voya Multi Manager International is 1.75 times less risky than Jpmorgan Small. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Jpmorgan Small Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,721  in Jpmorgan Small Cap on October 7, 2024 and sell it today you would earn a total of  87.00  from holding Jpmorgan Small Cap or generate 5.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Voya Multi Manager Internation  vs.  Jpmorgan Small Cap

Voya Multi Manager

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Multi Manager International has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Jpmorgan Small Cap

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Small Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Jpmorgan Small 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 Multi-manager and Jpmorgan Small

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

The idea behind Voya Multi Manager International and Jpmorgan Small Cap 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.

Check out your portfolio center.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..