Correlation Between Vanguard Long and Voya Investment

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

By analyzing existing cross correlation between Vanguard Long Term Porate and Voya Investment Grade, you can compare the effects of market volatilities on Vanguard Long and Voya Investment 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 Vanguard Long with a short position of Voya Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Long and Voya Investment.

Diversification Opportunities for Vanguard Long and Voya Investment

0.95

Correlation Coefficient

Vanguard Long  Voya Investment

Almost no diversification

The 3 months correlation between Vanguard and Voya is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Long Term Porate and Voya Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Investment Grade and Vanguard Long 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 Vanguard Long Term Porate are associated (or correlated) with Voya Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Investment Grade has no effect on the direction of Vanguard Long i.e., Vanguard Long and Voya Investment go up and down completely randomly.

Pair Corralation between Vanguard Long and Voya Investment

Assuming the 90 days horizon Vanguard Long is expected to generate 1.53 times less return on investment than Voya Investment. In addition to that, Vanguard Long is 1.72 times more volatile than Voya Investment Grade. It trades about 0.02 of its total potential returns per unit of risk. Voya Investment Grade is currently generating about 0.05 per unit of volatility. If you would invest  821.00  in Voya Investment Grade on October 9, 2024 and sell it today you would earn a total of  84.00  from holding Voya Investment Grade or generate 10.23% return on investment over 90 days.

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

Vanguard Long Term Porate  vs.  Voya Investment Grade

Vanguard Long Term

Risk-Adjusted Performance

0 of 100

Very Weak

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

Voya Investment Grade

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vanguard Long and Voya Investment

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

The idea behind Vanguard Long Term Porate and Voya Investment Grade 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.