Correlation Between Nasdaq-100(r) and Voya Index
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) 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 Nasdaq-100(r) and Voya Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Voya Index Solution, you can compare the effects of market volatilities on Nasdaq-100(r) 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 Nasdaq-100(r) with a short position of Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Voya Index.
Diversification Opportunities for Nasdaq-100(r) and Voya Index
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nasdaq-100(r) and Voya is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy 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 Nasdaq-100(r) 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 Nasdaq 100 2x Strategy 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 Nasdaq-100(r) i.e., Nasdaq-100(r) and Voya Index go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Voya Index
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 4.4 times more return on investment than Voya Index. However, Nasdaq-100(r) is 4.4 times more volatile than Voya Index Solution. It trades about 0.43 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.24 per unit of risk. If you would invest 42,016 in Nasdaq 100 2x Strategy on March 2, 2024 and sell it today you would earn a total of 5,871 from holding Nasdaq 100 2x Strategy or generate 13.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Voya Index Solution
Performance |
Timeline |
Nasdaq 100 2x |
Voya Index Solution |
Nasdaq-100(r) and Voya Index Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nasdaq-100(r) and Voya Index
The main advantage of trading using opposite Nasdaq-100(r) and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) 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.Nasdaq-100(r) vs. Nasdaq 100 2x Strategy | Nasdaq-100(r) vs. Nasdaq 100 2x Strategy | Nasdaq-100(r) vs. Ultra Nasdaq 100 Profunds | Nasdaq-100(r) vs. Ultranasdaq 100 Profund Ultranasdaq 100 |
Voya Index vs. Vanguard Target Retirement | Voya Index vs. Jpmorgan Smartretirement Income | Voya Index vs. Fidelity Freedom Income | Voya Index vs. HUMANA INC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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