Correlation Between Voya Financial and RenaissanceRe Holdings
Can any of the company-specific risk be diversified away by investing in both Voya Financial and RenaissanceRe Holdings 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 Voya Financial and RenaissanceRe Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Financial and RenaissanceRe Holdings, you can compare the effects of market volatilities on Voya Financial and RenaissanceRe Holdings 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 Voya Financial with a short position of RenaissanceRe Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Financial and RenaissanceRe Holdings.
Diversification Opportunities for Voya Financial and RenaissanceRe Holdings
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Voya and RenaissanceRe is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Voya Financial and RenaissanceRe Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RenaissanceRe Holdings and Voya Financial 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 Voya Financial are associated (or correlated) with RenaissanceRe Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RenaissanceRe Holdings has no effect on the direction of Voya Financial i.e., Voya Financial and RenaissanceRe Holdings go up and down completely randomly.
Pair Corralation between Voya Financial and RenaissanceRe Holdings
Given the investment horizon of 90 days Voya Financial is expected to generate 5.71 times more return on investment than RenaissanceRe Holdings. However, Voya Financial is 5.71 times more volatile than RenaissanceRe Holdings. It trades about 0.08 of its potential returns per unit of risk. RenaissanceRe Holdings is currently generating about 0.25 per unit of risk. If you would invest 7,986 in Voya Financial on September 1, 2024 and sell it today you would earn a total of 314.00 from holding Voya Financial or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Financial vs. RenaissanceRe Holdings
Performance |
| Timeline |
| Voya Financial |
| RenaissanceRe Holdings |
Voya Financial and RenaissanceRe Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Financial and RenaissanceRe Holdings
The main advantage of trading using opposite Voya Financial and RenaissanceRe Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Financial position performs unexpectedly, RenaissanceRe Holdings 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 RenaissanceRe Holdings will offset losses from the drop in RenaissanceRe Holdings' long position.| Voya Financial vs. Lendingtree | Voya Financial vs. Voya Financial | Voya Financial vs. B Riley Financial | Voya Financial vs. B Riley Financial |
| RenaissanceRe Holdings vs. SiriusPoint | RenaissanceRe Holdings vs. Greenlight Capital Re | RenaissanceRe Holdings vs. Maiden Holdings | RenaissanceRe Holdings vs. Renaissancere Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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