Correlation Between Voya Solution and Moderately Aggressive

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

Diversification Opportunities for Voya Solution and Moderately Aggressive

0.91

Correlation Coefficient

Voya Solution  Moderately Aggressive

Almost no diversification

The 3 months correlation between Voya and Moderately is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Voya Solution Aggressive and Moderately Aggressive Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderately Aggressive 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 Moderately Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderately Aggressive has no effect on the direction of Voya Solution i.e., Voya Solution and Moderately Aggressive go up and down completely randomly.

Pair Corralation between Voya Solution and Moderately Aggressive

Assuming the 90 days horizon Voya Solution is expected to generate 1.48 times less return on investment than Moderately Aggressive. In addition to that, Voya Solution is 1.19 times more volatile than Moderately Aggressive Balanced. It trades about 0.03 of its total potential returns per unit of risk. Moderately Aggressive Balanced is currently generating about 0.05 per unit of volatility. If you would invest  1,165  in Moderately Aggressive Balanced on October 10, 2024 and sell it today you would earn a total of  22.00  from holding Moderately Aggressive Balanced or generate 1.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Voya Solution Aggressive  vs.  Moderately Aggressive Balanced

Voya Solution Aggressive

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Solution Aggressive are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. 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.

Moderately Aggressive

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Moderately Aggressive Balanced are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Moderately Aggressive 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 Moderately Aggressive

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

The idea behind Voya Solution Aggressive and Moderately Aggressive Balanced 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.