Correlation Between T Rowe and Voya Investors

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

By analyzing existing cross correlation between T Rowe Price and Voya Investors Trust, you can compare the effects of market volatilities on T Rowe and Voya Investors 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 T Rowe with a short position of Voya Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rowe and Voya Investors.

Diversification Opportunities for T Rowe and Voya Investors

0.0

Correlation Coefficient

T Rowe  Voya Investors

Pay attention - limited upside

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

Pair Corralation between T Rowe and Voya Investors

Assuming the 90 days horizon T Rowe Price is expected to generate 8.71 times more return on investment than Voya Investors. However, T Rowe is 8.71 times more volatile than Voya Investors Trust. It trades about 0.11 of its potential returns per unit of risk. Voya Investors Trust is currently generating about 0.13 per unit of risk. If you would invest  13,905  in T Rowe Price on October 9, 2024 and sell it today you would earn a total of  4,880  from holding T Rowe Price or generate 35.1% return on investment over 90 days.

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

T Rowe Price  vs.  Voya Investors Trust

T Rowe Price

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, T Rowe may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Voya Investors Trust

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with T Rowe and Voya Investors

The main advantage of trading using opposite T Rowe and Voya Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe position performs unexpectedly, Voya Investors 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 Investors will offset losses from the drop in Voya Investors' long position.

The idea behind T Rowe Price and Voya Investors Trust 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 Global Correlations module to find global opportunities by holding instruments from different markets.