Correlation Between Voya Target and Mfs Intrinsic

Can any of the company-specific risk be diversified away by investing in both Voya Target and Mfs Intrinsic 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 Mfs Intrinsic 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 Mfs Intrinsic Value, you can compare the effects of market volatilities on Voya Target and Mfs Intrinsic 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 Mfs Intrinsic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Target and Mfs Intrinsic.

Diversification Opportunities for Voya Target and Mfs Intrinsic

0.89

Correlation Coefficient

Voya Target  Mfs Intrinsic

Very poor diversification

The 3 months correlation between Voya and Mfs is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and Mfs Intrinsic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Intrinsic Value 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 Mfs Intrinsic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Intrinsic Value has no effect on the direction of Voya Target i.e., Voya Target and Mfs Intrinsic go up and down completely randomly.

Pair Corralation between Voya Target and Mfs Intrinsic

Assuming the 90 days horizon Voya Target Retirement is expected to generate 0.9 times more return on investment than Mfs Intrinsic. However, Voya Target Retirement is 1.12 times less risky than Mfs Intrinsic. It trades about -0.23 of its potential returns per unit of risk. Mfs Intrinsic Value is currently generating about -0.25 per unit of risk. If you would invest  1,396  in Voya Target Retirement on October 11, 2024 and sell it today you would lose (58.00) from holding Voya Target Retirement or give up 4.15% 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.  Mfs Intrinsic Value

Voya Target Retirement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Target Retirement has generated negative risk-adjusted returns adding no value to fund investors. 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.

Mfs Intrinsic Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mfs Intrinsic Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Mfs Intrinsic 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 Mfs Intrinsic

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

The idea behind Voya Target Retirement and Mfs Intrinsic Value 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.