Correlation Between Voya Multi and Guidemark(r) Large

Can any of the company-specific risk be diversified away by investing in both Voya Multi and Guidemark(r) Large 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 and Guidemark(r) Large 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 Guidemark Large Cap, you can compare the effects of market volatilities on Voya Multi and Guidemark(r) Large 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 with a short position of Guidemark(r) Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Multi and Guidemark(r) Large.

Diversification Opportunities for Voya Multi and Guidemark(r) Large

0.28

Correlation Coefficient

Voya Multi  Guidemark(r) Large

Modest diversification

The 3 months correlation between Voya and Guidemark(r) is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Voya Multi Manager Internation and Guidemark Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Large Cap and Voya Multi 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 Guidemark(r) Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Large Cap has no effect on the direction of Voya Multi i.e., Voya Multi and Guidemark(r) Large go up and down completely randomly.

Pair Corralation between Voya Multi and Guidemark(r) Large

Assuming the 90 days horizon Voya Multi Manager International is expected to under-perform the Guidemark(r) Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Voya Multi Manager International is 1.55 times less risky than Guidemark(r) Large. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Guidemark Large Cap is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,326  in Guidemark Large Cap on October 24, 2024 and sell it today you would earn a total of  56.00  from holding Guidemark Large Cap or generate 1.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Voya Multi Manager Internation  vs.  Guidemark Large 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 fairly strong essential indicators, Voya Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guidemark Large Cap

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guidemark Large Cap are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Guidemark(r) Large 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 and Guidemark(r) Large

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

The idea behind Voya Multi Manager International and Guidemark Large 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.