Correlation Between Vy Baron and Voya Solution

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

By analyzing existing cross correlation between Vy Baron Growth and Voya Solution 2045, you can compare the effects of market volatilities on Vy Baron 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 Vy Baron with a short position of Voya Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vy Baron and Voya Solution.

Diversification Opportunities for Vy Baron and Voya Solution

0.84

Correlation Coefficient

Vy Baron  Voya Solution

Very poor diversification

The 3 months correlation between IBSAX and Voya is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Vy Baron Growth and Voya Solution 2045 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Solution 2045 and Vy Baron 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 Vy Baron Growth 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 2045 has no effect on the direction of Vy Baron i.e., Vy Baron and Voya Solution go up and down completely randomly.

Pair Corralation between Vy Baron and Voya Solution

Assuming the 90 days horizon Vy Baron Growth is expected to under-perform the Voya Solution. In addition to that, Vy Baron is 1.26 times more volatile than Voya Solution 2045. It trades about -0.26 of its total potential returns per unit of risk. Voya Solution 2045 is currently generating about -0.09 per unit of volatility. If you would invest  1,077  in Voya Solution 2045 on September 29, 2024 and sell it today you would lose (16.00) from holding Voya Solution 2045 or give up 1.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

Vy Baron Growth  vs.  Voya Solution 2045

Vy Baron Growth

Risk-Adjusted Performance

0 of 100

Very Weak

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

Voya Solution 2045

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Solution 2045 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.

Pair Trading with Vy Baron and Voya Solution

The main advantage of trading using opposite Vy Baron and Voya Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vy Baron 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 Vy Baron Growth and Voya Solution 2045 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.