Correlation Between BlackRock and Voya Financial
Can any of the company-specific risk be diversified away by investing in both BlackRock and Voya Financial 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 BlackRock and Voya Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock and Voya Financial, you can compare the effects of market volatilities on BlackRock and Voya Financial 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 BlackRock with a short position of Voya Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock and Voya Financial.
Diversification Opportunities for BlackRock and Voya Financial
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BlackRock and Voya is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and Voya Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Financial and BlackRock 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 BlackRock are associated (or correlated) with Voya Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Financial has no effect on the direction of BlackRock i.e., BlackRock and Voya Financial go up and down completely randomly.
Pair Corralation between BlackRock and Voya Financial
Assuming the 90 days trading horizon BlackRock is expected to generate 0.78 times more return on investment than Voya Financial. However, BlackRock is 1.29 times less risky than Voya Financial. It trades about 0.07 of its potential returns per unit of risk. Voya Financial is currently generating about 0.02 per unit of risk. If you would invest 63,535 in BlackRock on September 20, 2024 and sell it today you would earn a total of 33,965 from holding BlackRock or generate 53.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.82% |
| Values | Daily Returns |
BlackRock vs. Voya Financial
Performance |
| Timeline |
| BlackRock |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Voya Financial |
BlackRock and Voya Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock and Voya Financial
The main advantage of trading using opposite BlackRock and Voya Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock position performs unexpectedly, Voya Financial 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 Financial will offset losses from the drop in Voya Financial's long position.| BlackRock vs. Eidesvik Offshore ASA | BlackRock vs. Waste Management | BlackRock vs. Platinum Investment Management | BlackRock vs. SBM OFFSHORE |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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