Correlation Between Dow Jones and Voya Capital
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Voya Capital 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 Dow Jones and Voya Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Voya Capital Allocation, you can compare the effects of market volatilities on Dow Jones and Voya Capital 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 Dow Jones with a short position of Voya Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Voya Capital.
Diversification Opportunities for Dow Jones and Voya Capital
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Voya is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Voya Capital Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Capital Allocation and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Voya Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Capital Allocation has no effect on the direction of Dow Jones i.e., Dow Jones and Voya Capital go up and down completely randomly.
Pair Corralation between Dow Jones and Voya Capital
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.4 times more return on investment than Voya Capital. However, Dow Jones is 1.4 times more volatile than Voya Capital Allocation. It trades about 0.13 of its potential returns per unit of risk. Voya Capital Allocation is currently generating about 0.09 per unit of risk. If you would invest 3,624,787 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 866,278 from holding Dow Jones Industrial or generate 23.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Voya Capital Allocation
Performance |
| Timeline |
Dow Jones and Voya Capital Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Voya Capital Allocation
Pair trading matchups for Voya Capital
Pair Trading with Dow Jones and Voya Capital
The main advantage of trading using opposite Dow Jones and Voya Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Voya Capital 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 Capital will offset losses from the drop in Voya Capital's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Voya Capital vs. Lind Capital Partners | Voya Capital vs. Nuveen Minnesota Municipal | Voya Capital vs. Federated Pennsylvania Municipal | Voya Capital vs. Ab Impact Municipal |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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