Correlation Between Voya Limited and Voya Index

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

By analyzing existing cross correlation between Voya Limited Maturity and Voya Index Plus, you can compare the effects of market volatilities on Voya Limited and Voya Index 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 Limited with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Limited and Voya Index.

Diversification Opportunities for Voya Limited and Voya Index

-0.28

Correlation Coefficient

Voya Limited  Voya Index

Very good diversification

The 3 months correlation between Voya and Voya is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Voya Limited Maturity and Voya Index Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Plus and Voya Limited 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 Limited Maturity are associated (or correlated) with Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Plus has no effect on the direction of Voya Limited i.e., Voya Limited and Voya Index go up and down completely randomly.

Pair Corralation between Voya Limited and Voya Index

Assuming the 90 days horizon Voya Limited is expected to generate 25.77 times less return on investment than Voya Index. But when comparing it to its historical volatility, Voya Limited Maturity is 5.47 times less risky than Voya Index. It trades about 0.07 of its potential returns per unit of risk. Voya Index Plus is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  2,982  in Voya Index Plus on September 17, 2024 and sell it today you would earn a total of  82.00  from holding Voya Index Plus or generate 2.75% return on investment over 90 days.

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

Voya Limited Maturity  vs.  Voya Index Plus

Voya Limited Maturity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Voya Index Plus

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Index Plus are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Voya Index may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Voya Limited and Voya Index

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

The idea behind Voya Limited Maturity and Voya Index Plus 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.