Correlation Between Voya Strategic and Wilmington Diversified

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

By analyzing existing cross correlation between Voya Strategic Allocation and Wilmington Diversified Income, you can compare the effects of market volatilities on Voya Strategic and Wilmington Diversified 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 Strategic with a short position of Wilmington Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Strategic and Wilmington Diversified.

Diversification Opportunities for Voya Strategic and Wilmington Diversified

-0.27

Correlation Coefficient

Voya Strategic  Wilmington Diversified

Very good diversification

The 3 months correlation between Voya and Wilmington is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Voya Strategic Allocation and Wilmington Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Diversified and Voya Strategic 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 Strategic Allocation are associated (or correlated) with Wilmington Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Diversified has no effect on the direction of Voya Strategic i.e., Voya Strategic and Wilmington Diversified go up and down completely randomly.

Pair Corralation between Voya Strategic and Wilmington Diversified

If you would invest  1,383  in Voya Strategic Allocation on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Voya Strategic Allocation or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Voya Strategic Allocation  vs.  Wilmington Diversified Income

Voya Strategic Allocation

Risk-Adjusted Performance

0 of 100

Very Weak

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

Wilmington Diversified

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilmington Diversified Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Wilmington Diversified 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 Strategic and Wilmington Diversified

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

The idea behind Voya Strategic Allocation and Wilmington Diversified Income 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.