Correlation Between Voya Investors and Vy(r) T

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

Diversification Opportunities for Voya Investors and Vy(r) T

0.82
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Voya and Vy(r) is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Voya Investors Trust and Vy T Rowe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy T Rowe and Voya Investors 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 Investors Trust are associated (or correlated) with Vy(r) T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy T Rowe has no effect on the direction of Voya Investors i.e., Voya Investors and Vy(r) T go up and down completely randomly.

Pair Corralation between Voya Investors and Vy(r) T

Assuming the 90 days horizon Voya Investors is expected to generate 24.64 times less return on investment than Vy(r) T. But when comparing it to its historical volatility, Voya Investors Trust is 8.71 times less risky than Vy(r) T. It trades about 0.13 of its potential returns per unit of risk. Vy T Rowe is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  745.00  in Vy T Rowe on April 21, 2025 and sell it today you would earn a total of  206.00  from holding Vy T Rowe or generate 27.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Voya Investors Trust  vs.  Vy T Rowe

 Performance 
       Timeline  
Voya Investors Trust 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Voya Investors Trust are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Voya Investors is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Vy T Rowe 

Risk-Adjusted Performance

Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Vy T Rowe are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vy(r) T showed solid returns over the last few months and may actually be approaching a breakup point.

Voya Investors and Vy(r) T Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Voya Investors and Vy(r) T

The main advantage of trading using opposite Voya Investors and Vy(r) T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Investors position performs unexpectedly, Vy(r) T 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 Vy(r) T will offset losses from the drop in Vy(r) T's long position.
The idea behind Voya Investors Trust and Vy T Rowe 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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