Correlation Between Voya Stock and DTRGR

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

By analyzing existing cross correlation between Voya Stock Index and DTRGR 52 17 JAN 25, you can compare the effects of market volatilities on Voya Stock and DTRGR 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 Stock with a short position of DTRGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Stock and DTRGR.

Diversification Opportunities for Voya Stock and DTRGR

0.72

Correlation Coefficient

Voya Stock  DTRGR

Poor diversification

The 3 months correlation between Voya and DTRGR is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Voya Stock Index and DTRGR 52 17 JAN 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DTRGR 52 17 and Voya Stock 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 Stock Index are associated (or correlated) with DTRGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DTRGR 52 17 has no effect on the direction of Voya Stock i.e., Voya Stock and DTRGR go up and down completely randomly.

Pair Corralation between Voya Stock and DTRGR

Assuming the 90 days horizon Voya Stock Index is expected to generate 14.5 times more return on investment than DTRGR. However, Voya Stock is 14.5 times more volatile than DTRGR 52 17 JAN 25. It trades about 0.08 of its potential returns per unit of risk. DTRGR 52 17 JAN 25 is currently generating about -0.04 per unit of risk. If you would invest  1,953  in Voya Stock Index on September 23, 2024 and sell it today you would earn a total of  76.00  from holding Voya Stock Index or generate 3.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	50.77%
Values	Daily Returns

Voya Stock Index  vs.  DTRGR 52 17 JAN 25

Voya Stock Index

Risk-Adjusted Performance

6 of 100

Modest

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

DTRGR 52 17

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DTRGR 52 17 JAN 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, DTRGR is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Voya Stock and DTRGR

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

The idea behind Voya Stock Index and DTRGR 52 17 JAN 25 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.