Correlation Between Dow Jones and Voya Solution
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Voya Solution 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 Solution 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 Solution Income, you can compare the effects of market volatilities on Dow Jones and Voya Solution 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 Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Voya Solution.
Diversification Opportunities for Dow Jones and Voya Solution
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and Voya is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Voya Solution Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Solution Income 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 Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Solution Income has no effect on the direction of Dow Jones i.e., Dow Jones and Voya Solution go up and down completely randomly.
Pair Corralation between Dow Jones and Voya Solution
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.89 times more return on investment than Voya Solution. However, Dow Jones is 1.89 times more volatile than Voya Solution Income. It trades about 0.09 of its potential returns per unit of risk. Voya Solution Income is currently generating about 0.08 per unit of risk. If you would invest 3,369,988 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 1,121,077 from holding Dow Jones Industrial or generate 33.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Voya Solution Income
Performance |
| Timeline |
Dow Jones and Voya Solution Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Voya Solution Income
Pair trading matchups for Voya Solution
Pair Trading with Dow Jones and Voya Solution
The main advantage of trading using opposite Dow Jones and Voya Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Voya Solution 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 Solution will offset losses from the drop in Voya Solution's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Voya Solution vs. Voya Bond Index | Voya Solution vs. Voya Bond Index | Voya Solution vs. Voya Limited Maturity | Voya Solution 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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