Correlation Between Dow Jones and Voya Strategic
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Voya Strategic 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 Strategic 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 Strategic Income, you can compare the effects of market volatilities on Dow Jones and Voya Strategic 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 Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Voya Strategic.
Diversification Opportunities for Dow Jones and Voya Strategic
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and VOYA is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Voya Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Strategic 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 Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Strategic Income has no effect on the direction of Dow Jones i.e., Dow Jones and Voya Strategic go up and down completely randomly.
Pair Corralation between Dow Jones and Voya Strategic
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 4.62 times more return on investment than Voya Strategic. However, Dow Jones is 4.62 times more volatile than Voya Strategic Income. It trades about 0.15 of its potential returns per unit of risk. Voya Strategic Income is currently generating about 0.18 per unit of risk. If you would invest 3,868,632 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 603,574 from holding Dow Jones Industrial or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Voya Strategic Income
Performance |
| Timeline |
Dow Jones and Voya Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Voya Strategic Income
Pair trading matchups for Voya Strategic
Pair Trading with Dow Jones and Voya Strategic
The main advantage of trading using opposite Dow Jones and Voya Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Voya Strategic 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 Strategic will offset losses from the drop in Voya Strategic's long position.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
| Voya Strategic vs. HUMANA INC | Voya Strategic vs. Aquagold International | Voya Strategic vs. Barloworld Ltd ADR | Voya Strategic vs. Morningstar Unconstrained Allocation |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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