Correlation Between Voya Index and Vy(r) Columbia

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

By analyzing existing cross correlation between Voya Index Solution and Vy Umbia Small, you can compare the effects of market volatilities on Voya Index and Vy(r) Columbia 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 Index with a short position of Vy(r) Columbia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Vy(r) Columbia.

Diversification Opportunities for Voya Index and Vy(r) Columbia

0.97

Correlation Coefficient

Voya Index  Vy(r) Columbia

Almost no diversification

The 3 months correlation between Voya and Vy(r) is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Solution and Vy Umbia Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Umbia Small and Voya Index 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 Index Solution are associated (or correlated) with Vy(r) Columbia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Umbia Small has no effect on the direction of Voya Index i.e., Voya Index and Vy(r) Columbia go up and down completely randomly.

Pair Corralation between Voya Index and Vy(r) Columbia

Assuming the 90 days horizon Voya Index is expected to generate 1.01 times less return on investment than Vy(r) Columbia. But when comparing it to its historical volatility, Voya Index Solution is 1.64 times less risky than Vy(r) Columbia. It trades about 0.38 of its potential returns per unit of risk. Vy Umbia Small is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,322  in Vy Umbia Small on April 21, 2025 and sell it today you would earn a total of  237.00  from holding Vy Umbia Small or generate 17.93% return on investment over 90 days.

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

Voya Index Solution  vs.  Vy Umbia Small

Voya Index Solution

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Index Solution are ranked lower than 30 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Voya Index showed solid returns over the last few months and may actually be approaching a breakup point.

Vy Umbia Small

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vy Umbia Small are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vy(r) Columbia showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Voya Index and Vy(r) Columbia

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

The idea behind Voya Index Solution and Vy Umbia Small 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.