Correlation Between Wilmington Trust and Voya Solution

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

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

Diversification Opportunities for Wilmington Trust and Voya Solution

0.86

Correlation Coefficient

Wilmington Trust  Voya Solution

Very poor diversification

The 3 months correlation between Wilmington and Voya is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Trust Retirement and Voya Solution Aggressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Solution Aggressive and Wilmington Trust 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 Wilmington Trust Retirement are associated (or correlated) with Voya Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Solution Aggressive has no effect on the direction of Wilmington Trust i.e., Wilmington Trust and Voya Solution go up and down completely randomly.

Pair Corralation between Wilmington Trust and Voya Solution

Assuming the 90 days trading horizon Wilmington Trust Retirement is expected to under-perform the Voya Solution. In addition to that, Wilmington Trust is 1.17 times more volatile than Voya Solution Aggressive. It trades about -0.4 of its total potential returns per unit of risk. Voya Solution Aggressive is currently generating about -0.06 per unit of volatility. If you would invest  1,545  in Voya Solution Aggressive on September 25, 2024 and sell it today you would lose (16.00) from holding Voya Solution Aggressive or give up 1.04% of portfolio value over 90 days.

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

Wilmington Trust Retirement  vs.  Voya Solution Aggressive

Wilmington Trust Ret

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wilmington Trust Retirement are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Wilmington Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Solution Aggressive

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Solution Aggressive are ranked lower than 5 (%) 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.

Pair Trading with Wilmington Trust and Voya Solution

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

The idea behind Wilmington Trust Retirement and Voya Solution Aggressive 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.