Correlation Between Nasdaq-100 Index and Voya Target
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100 Index and Voya Target 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 Nasdaq-100 Index and Voya Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Voya Target Retirement, you can compare the effects of market volatilities on Nasdaq-100 Index and Voya Target 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 Nasdaq-100 Index with a short position of Voya Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100 Index and Voya Target.
Diversification Opportunities for Nasdaq-100 Index and Voya Target
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasdaq-100 and Voya is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Voya Target Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Target Retirement and Nasdaq-100 Index 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 Nasdaq 100 Index Fund are associated (or correlated) with Voya Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Target Retirement has no effect on the direction of Nasdaq-100 Index i.e., Nasdaq-100 Index and Voya Target go up and down completely randomly.
Pair Corralation between Nasdaq-100 Index and Voya Target
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to under-perform the Voya Target. In addition to that, Nasdaq-100 Index is 1.7 times more volatile than Voya Target Retirement. It trades about -0.07 of its total potential returns per unit of risk. Voya Target Retirement is currently generating about -0.02 per unit of volatility. If you would invest 1,474 in Voya Target Retirement on December 28, 2024 and sell it today you would lose (19.00) from holding Voya Target Retirement or give up 1.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.36% |
Values | Daily Returns |
Nasdaq 100 Index Fund vs. Voya Target Retirement
Performance |
Timeline |
Nasdaq 100 Index |
Voya Target Retirement |
Nasdaq-100 Index and Voya Target Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nasdaq-100 Index and Voya Target
The main advantage of trading using opposite Nasdaq-100 Index and Voya Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100 Index position performs unexpectedly, Voya Target 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 Target will offset losses from the drop in Voya Target's long position.Nasdaq-100 Index vs. Ultrashort Small Cap Profund | Nasdaq-100 Index vs. Ashmore Emerging Markets | Nasdaq-100 Index vs. Ridgeworth Ceredex Mid Cap | Nasdaq-100 Index vs. Fidelity Small Cap |
Voya Target vs. Federated Municipal Ultrashort | Voya Target vs. Summit Global Investments | Voya Target vs. Versatile Bond Portfolio | Voya Target vs. T Rowe Price |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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