Correlation Between Voya Emerging and Voya Target
Can any of the company-specific risk be diversified away by investing in both Voya Emerging and Voya Target 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 Emerging and Voya Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Emerging Markets and Voya Target Retirement, you can compare the effects of market volatilities on Voya Emerging and Voya Target 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 Emerging with a short position of Voya Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Emerging and Voya Target.
Diversification Opportunities for Voya Emerging and Voya Target
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Voya and Voya is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Voya Emerging Markets and Voya Target Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Target Retirement and Voya Emerging 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 Emerging Markets are associated (or correlated) with Voya Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Target Retirement has no effect on the direction of Voya Emerging i.e., Voya Emerging and Voya Target go up and down completely randomly.
Pair Corralation between Voya Emerging and Voya Target
Assuming the 90 days horizon Voya Emerging Markets is expected to generate 0.23 times more return on investment than Voya Target. However, Voya Emerging Markets is 4.44 times less risky than Voya Target. It trades about -0.25 of its potential returns per unit of risk. Voya Target Retirement is currently generating about -0.12 per unit of risk. If you would invest 855.00 in Voya Emerging Markets on February 3, 2024 and sell it today you would lose (8.00) from holding Voya Emerging Markets or give up 0.94% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Voya Emerging Markets vs. Voya Target Retirement
Performance |
Timeline |
Voya Emerging Markets |
Voya Target Retirement |
Voya Emerging and Voya Target Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Voya Emerging and Voya Target
The main advantage of trading using opposite Voya Emerging and Voya Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Emerging position performs unexpectedly, Voya Target 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 Target will offset losses from the drop in Voya Target's long position.Voya Emerging vs. Small Midcap Dividend Income | Voya Emerging vs. Eagle Small Cap | Voya Emerging vs. Mutual Of America | Voya Emerging vs. Lebenthal Lisanti Small |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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