Correlation Between Voya Large and Voya Index

Can any of the company-specific risk be diversified away by investing in both Voya Large 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 Large 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 Large Cap and Voya Index Plus, you can compare the effects of market volatilities on Voya Large 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 Large with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Large and Voya Index.

Diversification Opportunities for Voya Large and Voya Index

0.94

Correlation Coefficient

Voya Large  Voya Index

Almost no diversification

The 3 months correlation between Voya and Voya is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Voya Large Cap 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 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 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 Large i.e., Voya Large and Voya Index go up and down completely randomly.

Pair Corralation between Voya Large and Voya Index

Assuming the 90 days horizon Voya Large Cap is expected to under-perform the Voya Index. But the mutual fund apears to be less risky and, when comparing its historical volatility, Voya Large Cap is 1.87 times less risky than Voya Index. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Voya Index Plus is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,238  in Voya Index Plus on September 22, 2024 and sell it today you would earn a total of  4.00  from holding Voya Index Plus or generate 0.18% return on investment over 90 days.

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

Voya Large Cap  vs.  Voya Index Plus

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 Index Plus

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Voya Large and Voya Index

The main advantage of trading using opposite Voya Large and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Large 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 Large Cap 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.