Correlation Between Voya Index and Nationwide Destination
Can any of the company-specific risk be diversified away by investing in both Voya Index and Nationwide Destination 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 Nationwide Destination 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 Nationwide Destination 2035, you can compare the effects of market volatilities on Voya Index and Nationwide Destination 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 Nationwide Destination. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Nationwide Destination.
Diversification Opportunities for Voya Index and Nationwide Destination
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Voya and Nationwide is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Solution and Nationwide Destination 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Destination 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 Nationwide Destination. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Destination has no effect on the direction of Voya Index i.e., Voya Index and Nationwide Destination go up and down completely randomly.
Pair Corralation between Voya Index and Nationwide Destination
Assuming the 90 days horizon Voya Index Solution is expected to under-perform the Nationwide Destination. In addition to that, Voya Index is 1.02 times more volatile than Nationwide Destination 2035. It trades about -0.24 of its total potential returns per unit of risk. Nationwide Destination 2035 is currently generating about -0.23 per unit of volatility. If you would invest 940.00 in Nationwide Destination 2035 on January 19, 2024 and sell it today you would lose (25.00) from holding Nationwide Destination 2035 or give up 2.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Index Solution vs. Nationwide Destination 2035
Performance |
| Timeline |
| Voya Index Solution |
| Nationwide Destination |
Voya Index and Nationwide Destination Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Nationwide Destination
The main advantage of trading using opposite Voya Index and Nationwide Destination positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index position performs unexpectedly, Nationwide Destination 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 Nationwide Destination will offset losses from the drop in Nationwide Destination's long position.| Voya Index vs. American Funds 2035 | Voya Index vs. HUMANA INC | Voya Index vs. Aquagold International | Voya Index vs. Thrivent High Yield |
| Nationwide Destination vs. American Funds 2035 | Nationwide Destination vs. HUMANA INC | Nationwide Destination vs. Aquagold International | Nationwide Destination vs. Thrivent High Yield |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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