Correlation Between Treasury Wine and Voya Financial
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and Voya Financial 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 Treasury Wine and Voya Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Treasury Wine Estates and Voya Financial, you can compare the effects of market volatilities on Treasury Wine and Voya Financial 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 Treasury Wine with a short position of Voya Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and Voya Financial.
Diversification Opportunities for Treasury Wine and Voya Financial
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Treasury and Voya is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Voya Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Financial and Treasury Wine 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 Treasury Wine Estates are associated (or correlated) with Voya Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Financial has no effect on the direction of Treasury Wine i.e., Treasury Wine and Voya Financial go up and down completely randomly.
Pair Corralation between Treasury Wine and Voya Financial
Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the Voya Financial. But the stock apears to be less risky and, when comparing its historical volatility, Treasury Wine Estates is 1.1 times less risky than Voya Financial. The stock trades about -0.03 of its potential returns per unit of risk. The Voya Financial is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 6,463 in Voya Financial on September 26, 2024 and sell it today you would lose (113.00) from holding Voya Financial or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treasury Wine Estates vs. Voya Financial
Performance |
| Timeline |
| Treasury Wine Estates |
| Voya Financial |
Treasury Wine and Voya Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and Voya Financial
The main advantage of trading using opposite Treasury Wine and Voya Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, Voya Financial 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 Financial will offset losses from the drop in Voya Financial's long position.| Treasury Wine vs. Constellation Brands | Treasury Wine vs. Brown Forman | Treasury Wine vs. Thai Beverage Public | Treasury Wine vs. Rmy Cointreau SA |
| Voya Financial vs. Treasury Wine Estates | Voya Financial vs. Gladstone Investment | Voya Financial vs. FUTURE GAMING GRP | Voya Financial vs. Strategic Investments AS |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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