Correlation Between Vanguard Total and Voya Stock
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Voya Stock 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 Vanguard Total and Voya Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Stock and Voya Stock Index, you can compare the effects of market volatilities on Vanguard Total and Voya Stock 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 Vanguard Total with a short position of Voya Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Voya Stock.
Diversification Opportunities for Vanguard Total and Voya Stock
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Voya is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Voya Stock Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Stock Index and Vanguard Total 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 Vanguard Total Stock are associated (or correlated) with Voya Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Stock Index has no effect on the direction of Vanguard Total i.e., Vanguard Total and Voya Stock go up and down completely randomly.
Pair Corralation between Vanguard Total and Voya Stock
Assuming the 90 days horizon Vanguard Total Stock is expected to under-perform the Voya Stock. In addition to that, Vanguard Total is 1.04 times more volatile than Voya Stock Index. It trades about -0.31 of its total potential returns per unit of risk. Voya Stock Index is currently generating about -0.28 per unit of volatility. If you would invest 1,884 in Voya Stock Index on January 20, 2024 and sell it today you would lose (76.00) from holding Voya Stock Index or give up 4.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. Voya Stock Index
Performance |
| Timeline |
| Vanguard Total Stock |
| Voya Stock Index |
Vanguard Total and Voya Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Voya Stock
The main advantage of trading using opposite Vanguard Total and Voya Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Voya Stock 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 Stock will offset losses from the drop in Voya Stock's long position.| Vanguard Total vs. Vanguard Materials Index | Vanguard Total vs. Vanguard Limited Term Tax Exempt | Vanguard Total vs. Vanguard Limited Term Tax Exempt | Vanguard Total vs. Vanguard Global Minimum |
| Voya Stock vs. Voya Bond Index | Voya Stock vs. Voya Bond Index | Voya Stock vs. Voya Limited Maturity | Voya Stock vs. Voya Limited Maturity |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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