Correlation Between Voya Index and Blackrock Science

Can any of the company-specific risk be diversified away by investing in both Voya Index and Blackrock Science 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 Index and Blackrock Science into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Voya Index Solution and Blackrock Science Technology, you can compare the effects of market volatilities on Voya Index and Blackrock Science 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 Index with a short position of Blackrock Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Blackrock Science.

Diversification Opportunities for Voya Index and Blackrock Science

0.7

Correlation Coefficient

Voya Index  Blackrock Science

Poor diversification

The 3 months correlation between Voya and Blackrock is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Solution and Blackrock Science Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Science and Voya Index 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 Index Solution are associated (or correlated) with Blackrock Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Science has no effect on the direction of Voya Index i.e., Voya Index and Blackrock Science go up and down completely randomly.

Pair Corralation between Voya Index and Blackrock Science

Assuming the 90 days horizon Voya Index is expected to generate 3.56 times less return on investment than Blackrock Science. But when comparing it to its historical volatility, Voya Index Solution is 3.0 times less risky than Blackrock Science. It trades about 0.08 of its potential returns per unit of risk. Blackrock Science Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  6,460  in Blackrock Science Technology on September 14, 2024 and sell it today you would earn a total of  525.00  from holding Blackrock Science Technology or generate 8.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Voya Index Solution  vs.  Blackrock Science Technology

Voya Index Solution

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Index Solution are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Voya Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Science

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Science Technology are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Blackrock Science may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Voya Index and Blackrock Science

The main advantage of trading using opposite Voya Index and Blackrock Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index position performs unexpectedly, Blackrock Science 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 Blackrock Science will offset losses from the drop in Blackrock Science's long position.

The idea behind Voya Index Solution and Blackrock Science Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.