Correlation Between Red Oak and Voya Retirement

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

By analyzing existing cross correlation between Red Oak Technology and Voya Retirement Servative, you can compare the effects of market volatilities on Red Oak and Voya Retirement 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 Red Oak with a short position of Voya Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Oak and Voya Retirement.

Diversification Opportunities for Red Oak and Voya Retirement

-0.13

Correlation Coefficient

Red Oak  Voya Retirement

Good diversification

The 3 months correlation between Red and Voya is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Red Oak Technology and Voya Retirement Servative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Retirement Servative and Red Oak 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 Red Oak Technology are associated (or correlated) with Voya Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Retirement Servative has no effect on the direction of Red Oak i.e., Red Oak and Voya Retirement go up and down completely randomly.

Pair Corralation between Red Oak and Voya Retirement

Assuming the 90 days horizon Red Oak Technology is expected to under-perform the Voya Retirement. In addition to that, Red Oak is 5.26 times more volatile than Voya Retirement Servative. It trades about -0.1 of its total potential returns per unit of risk. Voya Retirement Servative is currently generating about 0.06 per unit of volatility. If you would invest  803.00  in Voya Retirement Servative on December 19, 2024 and sell it today you would earn a total of  8.00  from holding Voya Retirement Servative or generate 1.0% return on investment over 90 days.

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

Red Oak Technology  vs.  Voya Retirement Servative

Red Oak Technology

Risk-Adjusted Performance

Very Weak

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

Voya Retirement Servative

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Red Oak and Voya Retirement

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

The idea behind Red Oak Technology and Voya Retirement Servative 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.