Correlation Between Voya Target and Bny Mellon

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

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

Diversification Opportunities for Voya Target and Bny Mellon

0.86

Correlation Coefficient

Voya Target  Bny Mellon

Very poor diversification

The 3 months correlation between Voya and Bny is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and Bny Mellon Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Porate and Voya Target 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 Target Retirement are associated (or correlated) with Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon Porate has no effect on the direction of Voya Target i.e., Voya Target and Bny Mellon go up and down completely randomly.

Pair Corralation between Voya Target and Bny Mellon

Assuming the 90 days horizon Voya Target Retirement is expected to generate 2.3 times more return on investment than Bny Mellon. However, Voya Target is 2.3 times more volatile than Bny Mellon Porate. It trades about 0.0 of its potential returns per unit of risk. Bny Mellon Porate is currently generating about -0.07 per unit of risk. If you would invest  1,355  in Voya Target Retirement on October 24, 2024 and sell it today you would lose (2.00) from holding Voya Target Retirement or give up 0.15% of portfolio value over 90 days.

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

Voya Target Retirement  vs.  Bny Mellon Porate

Voya Target Retirement

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Target Retirement are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking indicators, Voya Target is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bny Mellon Porate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Voya Target and Bny Mellon

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

The idea behind Voya Target Retirement and Bny Mellon Porate 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.