Correlation Between Voya Solution and Pia High

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

By analyzing existing cross correlation between Voya Solution Conservative and Pia High Yield, you can compare the effects of market volatilities on Voya Solution and Pia High 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 Pia High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Solution and Pia High.

Diversification Opportunities for Voya Solution and Pia High

0.64

Correlation Coefficient

Voya Solution  Pia High

Poor diversification

The 3 months correlation between Voya and Pia is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Voya Solution Conservative and Pia High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pia High Yield 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 Conservative are associated (or correlated) with Pia High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pia High Yield has no effect on the direction of Voya Solution i.e., Voya Solution and Pia High go up and down completely randomly.

Pair Corralation between Voya Solution and Pia High

Assuming the 90 days horizon Voya Solution is expected to generate 1.21 times less return on investment than Pia High. In addition to that, Voya Solution is 2.06 times more volatile than Pia High Yield. It trades about 0.08 of its total potential returns per unit of risk. Pia High Yield is currently generating about 0.2 per unit of volatility. If you would invest  830.00  in Pia High Yield on October 9, 2024 and sell it today you would earn a total of  75.00  from holding Pia High Yield or generate 9.04% return on investment over 90 days.

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

Voya Solution Conservative  vs.  Pia High Yield

Voya Solution Conser

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pia High Yield

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pia High Yield are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pia High 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 Pia High

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

The idea behind Voya Solution Conservative and Pia High Yield 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.