Correlation Between Voya Large and Voya Multi

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

By analyzing existing cross correlation between Voya Large Cap and Voya Multi Manager Mid, you can compare the effects of market volatilities on Voya Large and Voya Multi 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 Large with a short position of Voya Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Large and Voya Multi.

Diversification Opportunities for Voya Large and Voya Multi

0.45

Correlation Coefficient

Voya Large  Voya Multi

Very weak diversification

The 3 months correlation between Voya and Voya is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Voya Large Cap and Voya Multi Manager Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Multi Manager and Voya Large 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 Large Cap are associated (or correlated) with Voya Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Multi Manager has no effect on the direction of Voya Large i.e., Voya Large and Voya Multi go up and down completely randomly.

Pair Corralation between Voya Large and Voya Multi

Assuming the 90 days horizon Voya Large Cap is expected to generate 0.29 times more return on investment than Voya Multi. However, Voya Large Cap is 3.48 times less risky than Voya Multi. It trades about -0.41 of its potential returns per unit of risk. Voya Multi Manager Mid is currently generating about -0.33 per unit of risk. If you would invest  613.00  in Voya Large Cap on September 22, 2024 and sell it today you would lose (35.00) from holding Voya Large Cap or give up 5.71% of portfolio value over 90 days.

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

Voya Large Cap  vs.  Voya Multi Manager Mid

Voya Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Voya Multi Manager

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Multi Manager Mid has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Voya Large and Voya Multi

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

The idea behind Voya Large Cap and Voya Multi Manager Mid 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.