Correlation Between High-yield Fund and Voya High

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Can any of the company-specific risk be diversified away by investing in both High-yield Fund and Voya High 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 High-yield Fund and Voya High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Fund A and Voya High Yield, you can compare the effects of market volatilities on High-yield Fund and Voya High 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 High-yield Fund with a short position of Voya High. Check out your portfolio center. Please also check ongoing floating volatility patterns of High-yield Fund and Voya High.

Diversification Opportunities for High-yield Fund and Voya High

0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between High-yield and Voya is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Fund A and Voya High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya High Yield and High-yield Fund 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 High Yield Fund A are associated (or correlated) with Voya High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya High Yield has no effect on the direction of High-yield Fund i.e., High-yield Fund and Voya High go up and down completely randomly.

Pair Corralation between High-yield Fund and Voya High

Assuming the 90 days horizon High-yield Fund is expected to generate 1.07 times less return on investment than Voya High. In addition to that, High-yield Fund is 1.19 times more volatile than Voya High Yield. It trades about 0.09 of its total potential returns per unit of risk. Voya High Yield is currently generating about 0.12 per unit of volatility. If you would invest  876.00  in Voya High Yield on September 4, 2025 and sell it today you would earn a total of  11.00  from holding Voya High Yield or generate 1.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

High Yield Fund A  vs.  Voya High Yield

 Performance 
       Timeline  
High Yield Fund 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in High Yield Fund A are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, High-yield Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Voya High Yield 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Voya High Yield are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Voya High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

High-yield Fund and Voya High Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with High-yield Fund and Voya High

The main advantage of trading using opposite High-yield Fund and Voya High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High-yield Fund position performs unexpectedly, Voya High 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 High will offset losses from the drop in Voya High's long position.
The idea behind High Yield Fund A and Voya High Yield 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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