Correlation Between Voya Russelltm and Voya Bond

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Can any of the company-specific risk be diversified away by investing in both Voya Russelltm and Voya Bond 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 Russelltm and Voya Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Russelltm Mid and Voya Bond Index, you can compare the effects of market volatilities on Voya Russelltm and Voya Bond 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 Russelltm with a short position of Voya Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Russelltm and Voya Bond.

Diversification Opportunities for Voya Russelltm and Voya Bond

VoyaVoyaDiversified AwayVoyaVoyaDiversified Away100%
-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Voya and Voya is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Voya Russelltm Mid and Voya Bond Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Bond Index and Voya Russelltm 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 Russelltm Mid are associated (or correlated) with Voya Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Bond Index has no effect on the direction of Voya Russelltm i.e., Voya Russelltm and Voya Bond go up and down completely randomly.

Pair Corralation between Voya Russelltm and Voya Bond

Assuming the 90 days horizon Voya Russelltm Mid is expected to generate 2.65 times more return on investment than Voya Bond. However, Voya Russelltm is 2.65 times more volatile than Voya Bond Index. It trades about 0.03 of its potential returns per unit of risk. Voya Bond Index is currently generating about -0.18 per unit of risk. If you would invest  1,143  in Voya Russelltm Mid on September 30, 2024 and sell it today you would earn a total of  17.00  from holding Voya Russelltm Mid or generate 1.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Voya Russelltm Mid  vs.  Voya Bond Index

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -4-20246810
JavaScript chart by amCharts 3.21.15IIRMX ILABX
       Timeline  
Voya Russelltm Mid 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Voya Russelltm Mid are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Voya Russelltm is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecDec11.411.611.81212.212.4
Voya Bond Index 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Voya Bond Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Voya Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecDec8.98.9599.059.19.159.2

Voya Russelltm and Voya Bond Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.72-2.04-1.36-0.670.00.681.382.082.783.48 0.51.01.52.02.53.03.5
JavaScript chart by amCharts 3.21.15IIRMX ILABX
       Returns  

Pair Trading with Voya Russelltm and Voya Bond

The main advantage of trading using opposite Voya Russelltm and Voya Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Russelltm position performs unexpectedly, Voya Bond 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 Bond will offset losses from the drop in Voya Bond's long position.
The idea behind Voya Russelltm Mid and Voya Bond Index 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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