Correlation Between Dow Jones and Voya Index
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Voya Index 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 Index 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 Index Solution, you can compare the effects of market volatilities on Dow Jones and Voya Index 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 Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Voya Index.
Diversification Opportunities for Dow Jones and Voya Index
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and Voya is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution 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 Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Dow Jones i.e., Dow Jones and Voya Index go up and down completely randomly.
Pair Corralation between Dow Jones and Voya Index
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.23 times more return on investment than Voya Index. However, Dow Jones is 1.23 times more volatile than Voya Index Solution. It trades about 0.12 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.12 per unit of risk. If you would invest 3,595,089 in Dow Jones Industrial on August 26, 2024 and sell it today you would earn a total of 834,562 from holding Dow Jones Industrial or generate 23.21% 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 Index Solution
Performance |
| Timeline |
Dow Jones and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Voya Index Solution
Pair trading matchups for Voya Index
Pair Trading with Dow Jones and Voya Index
The main advantage of trading using opposite Dow Jones and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Voya Index 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 Index will offset losses from the drop in Voya Index's long position.| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
| Voya Index vs. Voya Bond Index | Voya Index vs. Voya Bond Index | Voya Index vs. Voya Limited Maturity | Voya Index vs. Voya Limited Maturity |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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