Correlation Between Vanguard Mid and Voya Equity

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

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

Diversification Opportunities for Vanguard Mid and Voya Equity

0.0

Correlation Coefficient

Vanguard Mid  Voya Equity

Pay attention - limited upside

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

Pair Corralation between Vanguard Mid and Voya Equity

If you would invest  8,358  in Vanguard Mid Cap Value on December 29, 2024 and sell it today you would lose (16.00) from holding Vanguard Mid Cap Value or give up 0.19% of portfolio value over 90 days.

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

Vanguard Mid Cap Value  vs.  Voya Equity Trust

Vanguard Mid Cap

Risk-Adjusted Performance

Very Weak

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

Voya Equity Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voya Equity Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Voya Equity 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 Mid and Voya Equity

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

The idea behind Vanguard Mid Cap Value and Voya Equity 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.