Correlation Between Voya Morgan and Voya Index

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Can any of the company-specific risk be diversified away by investing in both Voya Morgan and Voya Index 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 Voya Morgan and Voya Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Morgan Stanley and Voya Index Solution, you can compare the effects of market volatilities on Voya Morgan and Voya Index 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 Voya Morgan with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Morgan and Voya Index.

Diversification Opportunities for Voya Morgan and Voya Index

VoyaVoyaDiversified AwayVoyaVoyaDiversified Away100%
0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between Voya and Voya is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Voya Morgan Stanley and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution and Voya Morgan 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 Voya Morgan Stanley are associated (or correlated) with Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Voya Morgan i.e., Voya Morgan and Voya Index go up and down completely randomly.

Pair Corralation between Voya Morgan and Voya Index

Assuming the 90 days horizon Voya Morgan Stanley is expected to under-perform the Voya Index. In addition to that, Voya Morgan is 1.12 times more volatile than Voya Index Solution. It trades about -0.13 of its total potential returns per unit of risk. Voya Index Solution is currently generating about -0.09 per unit of volatility. If you would invest  1,622  in Voya Index Solution on October 13, 2024 and sell it today you would lose (44.00) from holding Voya Index Solution or give up 2.71% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Voya Morgan Stanley  vs.  Voya Index Solution

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -2-1012
JavaScript chart by amCharts 3.21.15VPRDX IDXFX
       Timeline  
Voya Morgan Stanley 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Voya Morgan Stanley has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Voya Morgan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan15.315.415.515.615.715.815.916
Voya Index Solution 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Voya Index Solution has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Voya Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan15.815.91616.116.216.316.4

Voya Morgan and Voya Index Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.88-0.63-0.38-0.13-0.02270.06440.250.50.751.0 0.51.01.5
JavaScript chart by amCharts 3.21.15VPRDX IDXFX
       Returns  

Pair Trading with Voya Morgan and Voya Index

The main advantage of trading using opposite Voya Morgan and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Morgan position performs unexpectedly, Voya Index 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 Index will offset losses from the drop in Voya Index's long position.
The idea behind Voya Morgan Stanley and Voya Index Solution 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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