Correlation Between Deutsche Multi-asset and Voya Midcap
Can any of the company-specific risk be diversified away by investing in both Deutsche Multi-asset and Voya Midcap 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 Deutsche Multi-asset and Voya Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Multi Asset Moderate and Voya Midcap Opportunities, you can compare the effects of market volatilities on Deutsche Multi-asset and Voya Midcap 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 Deutsche Multi-asset with a short position of Voya Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Multi-asset and Voya Midcap.
Diversification Opportunities for Deutsche Multi-asset and Voya Midcap
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Deutsche and Voya is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Multi Asset Moderate and Voya Midcap Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Midcap Opportunities and Deutsche Multi-asset 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 Deutsche Multi Asset Moderate are associated (or correlated) with Voya Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Midcap Opportunities has no effect on the direction of Deutsche Multi-asset i.e., Deutsche Multi-asset and Voya Midcap go up and down completely randomly.
Pair Corralation between Deutsche Multi-asset and Voya Midcap
Assuming the 90 days horizon Deutsche Multi-asset is expected to generate 1.05 times less return on investment than Voya Midcap. But when comparing it to its historical volatility, Deutsche Multi Asset Moderate is 2.33 times less risky than Voya Midcap. It trades about 0.24 of its potential returns per unit of risk. Voya Midcap Opportunities is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 377.00 in Voya Midcap Opportunities on May 27, 2025 and sell it today you would earn a total of 22.00 from holding Voya Midcap Opportunities or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Multi Asset Moderate vs. Voya Midcap Opportunities
Performance |
| Timeline |
| Deutsche Multi Asset |
| Voya Midcap Opportunities |
Deutsche Multi-asset and Voya Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Multi-asset and Voya Midcap
The main advantage of trading using opposite Deutsche Multi-asset and Voya Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Multi-asset position performs unexpectedly, Voya Midcap 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 Midcap will offset losses from the drop in Voya Midcap's long position.The idea behind Deutsche Multi Asset Moderate and Voya Midcap Opportunities 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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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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