Correlation Between Voya Solution and Vy(r) Jpmorgan

Can any of the company-specific risk be diversified away by investing in both Voya Solution and Vy(r) Jpmorgan 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 Solution and Vy(r) Jpmorgan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Voya Solution Aggressive and Vy Jpmorgan Small, you can compare the effects of market volatilities on Voya Solution and Vy(r) Jpmorgan 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 Solution with a short position of Vy(r) Jpmorgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Solution and Vy(r) Jpmorgan.

Diversification Opportunities for Voya Solution and Vy(r) Jpmorgan

0.87

Correlation Coefficient

Voya Solution  Vy(r) Jpmorgan

Very poor diversification

The 3 months correlation between Voya and Vy(r) is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Voya Solution Aggressive and Vy Jpmorgan Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Jpmorgan Small and Voya Solution 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 Solution Aggressive are associated (or correlated) with Vy(r) Jpmorgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Jpmorgan Small has no effect on the direction of Voya Solution i.e., Voya Solution and Vy(r) Jpmorgan go up and down completely randomly.

Pair Corralation between Voya Solution and Vy(r) Jpmorgan

Assuming the 90 days horizon Voya Solution Aggressive is expected to generate 0.63 times more return on investment than Vy(r) Jpmorgan. However, Voya Solution Aggressive is 1.59 times less risky than Vy(r) Jpmorgan. It trades about 0.08 of its potential returns per unit of risk. Vy Jpmorgan Small is currently generating about 0.03 per unit of risk. If you would invest  1,114  in Voya Solution Aggressive on October 13, 2024 and sell it today you would earn a total of  375.00  from holding Voya Solution Aggressive or generate 33.66% return on investment over 90 days.

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

Voya Solution Aggressive  vs.  Vy Jpmorgan Small

Voya Solution Aggressive

Risk-Adjusted Performance

0 of 100

Very Weak

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

Vy Jpmorgan Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vy Jpmorgan Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Vy(r) Jpmorgan 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 Solution and Vy(r) Jpmorgan

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

The idea behind Voya Solution Aggressive and Vy Jpmorgan Small 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.

Check out your portfolio center.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.