Correlation Between Dow Jones and Voya Vacs
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Voya Vacs 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 Vacs 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 Vacs Series, you can compare the effects of market volatilities on Dow Jones and Voya Vacs 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 Vacs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Voya Vacs.
Diversification Opportunities for Dow Jones and Voya Vacs
Average diversification
The 3 months correlation between Dow and Voya is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Voya Vacs Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Vacs Series 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 Vacs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Vacs Series has no effect on the direction of Dow Jones i.e., Dow Jones and Voya Vacs go up and down completely randomly.
Pair Corralation between Dow Jones and Voya Vacs
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.78 times more return on investment than Voya Vacs. However, Dow Jones Industrial is 1.28 times less risky than Voya Vacs. It trades about 0.33 of its potential returns per unit of risk. Voya Vacs Series is currently generating about 0.13 per unit of risk. If you would invest 4,239,227 in Dow Jones Industrial on November 3, 2024 and sell it today you would earn a total of 215,239 from holding Dow Jones Industrial or generate 5.08% 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 Vacs Series
Performance |
| Timeline |
Dow Jones and Voya Vacs Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Voya Vacs Series
Pair trading matchups for Voya Vacs
Pair Trading with Dow Jones and Voya Vacs
The main advantage of trading using opposite Dow Jones and Voya Vacs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Voya Vacs 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 Vacs will offset losses from the drop in Voya Vacs' long position.| Dow Jones vs. Rambler Metals and | Dow Jones vs. Nicola Mining | Dow Jones vs. Old Dominion Freight | Dow Jones vs. United Guardian |
| Voya Vacs vs. Highland Longshort Healthcare | Voya Vacs vs. Invesco Global Health | Voya Vacs vs. The Hartford Healthcare | Voya Vacs vs. Eaton Vance Worldwide |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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