Correlation Between Sp Smallcap and Voya Bond

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

By analyzing existing cross correlation between Sp Smallcap 600 and Voya Bond Index, you can compare the effects of market volatilities on Sp Smallcap and Voya Bond 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 Sp Smallcap with a short position of Voya Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Smallcap and Voya Bond.

Diversification Opportunities for Sp Smallcap and Voya Bond

0.0

Correlation Coefficient

Sp Smallcap  Voya Bond

Pay attention - limited upside

The 3 months correlation between RYSVX and Voya is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sp Smallcap 600 and Voya Bond Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Bond Index and Sp Smallcap 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 Sp Smallcap 600 are associated (or correlated) with Voya Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Bond Index has no effect on the direction of Sp Smallcap i.e., Sp Smallcap and Voya Bond go up and down completely randomly.

Pair Corralation between Sp Smallcap and Voya Bond

If you would invest (100.00) in Voya Bond Index on December 19, 2024 and sell it today you would earn a total of  100.00  from holding Voya Bond Index or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sp Smallcap 600  vs.  Voya Bond Index

Sp Smallcap 600

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sp Smallcap 600 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 Bond Index

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Sp Smallcap and Voya Bond

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

The idea behind Sp Smallcap 600 and Voya Bond Index 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.