Correlation Between Expensify and Voya Index

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

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

Diversification Opportunities for Expensify and Voya Index

0.06

Correlation Coefficient

Expensify  Voya Index

Significant diversification

The 3 months correlation between Expensify and Voya is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Expensify and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution and Expensify 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 Expensify are associated (or correlated) with Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Expensify i.e., Expensify and Voya Index go up and down completely randomly.

Pair Corralation between Expensify and Voya Index

Given the investment horizon of 90 days Expensify is expected to under-perform the Voya Index. In addition to that, Expensify is 7.89 times more volatile than Voya Index Solution. It trades about -0.22 of its total potential returns per unit of risk. Voya Index Solution is currently generating about -0.07 per unit of volatility. If you would invest  1,191  in Voya Index Solution on January 16, 2024 and sell it today you would lose (11.00) from holding Voya Index Solution or give up 0.92% of portfolio value over 90 days.

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

Expensify  vs.  Voya Index Solution

Expensify

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expensify has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Voya Index Solution

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Index Solution are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Voya Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Expensify and Voya Index

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

The idea behind Expensify and Voya Index Solution 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.