Correlation Between Dow Jones and Voya Floating
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Voya Floating 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 Floating 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 Floating Rate, you can compare the effects of market volatilities on Dow Jones and Voya Floating 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 Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Voya Floating.
Diversification Opportunities for Dow Jones and Voya Floating
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and Voya is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Voya Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Floating Rate 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 Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Floating Rate has no effect on the direction of Dow Jones i.e., Dow Jones and Voya Floating go up and down completely randomly.
Pair Corralation between Dow Jones and Voya Floating
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 3.21 times more return on investment than Voya Floating. However, Dow Jones is 3.21 times more volatile than Voya Floating Rate. It trades about 0.11 of its potential returns per unit of risk. Voya Floating Rate is currently generating about 0.17 per unit of risk. If you would invest 3,446,369 in Dow Jones Industrial on September 12, 2024 and sell it today you would earn a total of 978,414 from holding Dow Jones Industrial or generate 28.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Voya Floating Rate
Performance |
| Timeline |
Dow Jones and Voya Floating Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Voya Floating Rate
Pair trading matchups for Voya Floating
Pair Trading with Dow Jones and Voya Floating
The main advantage of trading using opposite Dow Jones and Voya Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Voya Floating 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 Floating will offset losses from the drop in Voya Floating's long position.| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
| Voya Floating vs. Transamerica Intermediate Muni | Voya Floating vs. Blrc Sgy Mnp | Voya Floating vs. Baird Strategic Municipal | Voya Floating vs. Morningstar Municipal Bond |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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