Correlation Between Dow Jones and Voya International
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Voya International 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 International 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 International Index, you can compare the effects of market volatilities on Dow Jones and Voya International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Voya International.
Diversification Opportunities for Dow Jones and Voya International
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Voya is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Voya International Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya International Index 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya International Index has no effect on the direction of Dow Jones i.e., Dow Jones and Voya International go up and down completely randomly.
Pair Corralation between Dow Jones and Voya International
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.18 times more return on investment than Voya International. However, Dow Jones is 1.18 times more volatile than Voya International Index. It trades about 0.19 of its potential returns per unit of risk. Voya International Index is currently generating about -0.18 per unit of risk. If you would invest 4,251,495 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 178,156 from holding Dow Jones Industrial or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dow Jones Industrial vs. Voya International Index
Performance |
| Timeline |
Dow Jones and Voya International Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Voya International Index
Pair trading matchups for Voya International
Pair Trading with Dow Jones and Voya International
The main advantage of trading using opposite Dow Jones and Voya International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Voya International 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 International will offset losses from the drop in Voya International's long position.| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
| Voya International vs. Nuveen Global Real | Voya International vs. Kinetics Global Fund | Voya International vs. Ms Global Fixed | Voya International vs. Commonwealth Global Fund |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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