Correlation Between Voya Solution and Adams Diversified

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

Diversification Opportunities for Voya Solution and Adams Diversified

-0.21

Correlation Coefficient

Voya Solution  Adams Diversified

Very good diversification

The 3 months correlation between Voya and Adams is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Voya Solution Conservative and Adams Diversified Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adams Diversified Equity 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 Adams Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adams Diversified Equity has no effect on the direction of Voya Solution i.e., Voya Solution and Adams Diversified go up and down completely randomly.

Pair Corralation between Voya Solution and Adams Diversified

Assuming the 90 days horizon Voya Solution Conservative is expected to under-perform the Adams Diversified. But the mutual fund apears to be less risky and, when comparing its historical volatility, Voya Solution Conservative is 3.43 times less risky than Adams Diversified. The mutual fund trades about -0.29 of its potential returns per unit of risk. The Adams Diversified Equity is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  2,320  in Adams Diversified Equity on October 11, 2024 and sell it today you would lose (37.00) from holding Adams Diversified Equity or give up 1.59% of portfolio value over 90 days.

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

Voya Solution Conservative  vs.  Adams Diversified Equity

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.

Adams Diversified Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adams Diversified Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Adams Diversified 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 Adams Diversified

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

The idea behind Voya Solution Conservative and Adams Diversified Equity 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.