Correlation Between Emerging Growth and Voya Large

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

By analyzing existing cross correlation between Emerging Growth Fund and Voya Large Cap Growth, you can compare the effects of market volatilities on Emerging Growth and Voya Large 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 Emerging Growth with a short position of Voya Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Growth and Voya Large.

Diversification Opportunities for Emerging Growth and Voya Large

0.79

Correlation Coefficient

Emerging Growth  Voya Large

Poor diversification

The 3 months correlation between Emerging and Voya is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Growth Fund and Voya Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Large Cap and Emerging Growth 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 Emerging Growth Fund are associated (or correlated) with Voya Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Emerging Growth i.e., Emerging Growth and Voya Large go up and down completely randomly.

Pair Corralation between Emerging Growth and Voya Large

Assuming the 90 days horizon Emerging Growth is expected to generate 3.86 times less return on investment than Voya Large. In addition to that, Emerging Growth is 1.45 times more volatile than Voya Large Cap Growth. It trades about 0.06 of its total potential returns per unit of risk. Voya Large Cap Growth is currently generating about 0.32 per unit of volatility. If you would invest  5,491  in Voya Large Cap Growth on April 30, 2025 and sell it today you would earn a total of  1,040  from holding Voya Large Cap Growth or generate 18.94% return on investment over 90 days.

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

Emerging Growth Fund  vs.  Voya Large Cap Growth

Emerging Growth

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Emerging Growth Fund are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Emerging Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Large Cap Growth are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Voya Large showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Emerging Growth and Voya Large

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

The idea behind Emerging Growth Fund and Voya Large Cap Growth 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.