Correlation Between Adams Natural and Voya Stock
Can any of the company-specific risk be diversified away by investing in both Adams Natural and Voya Stock 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 Adams Natural and Voya Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Natural Resources and Voya Stock Index, you can compare the effects of market volatilities on Adams Natural and Voya Stock 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 Adams Natural with a short position of Voya Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Natural and Voya Stock.
Diversification Opportunities for Adams Natural and Voya Stock
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Adams and Voya is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources and Voya Stock Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Stock Index and Adams Natural 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 Adams Natural Resources are associated (or correlated) with Voya Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Stock Index has no effect on the direction of Adams Natural i.e., Adams Natural and Voya Stock go up and down completely randomly.
Pair Corralation between Adams Natural and Voya Stock
Considering the 90-day investment horizon Adams Natural Resources is expected to under-perform the Voya Stock. In addition to that, Adams Natural is 1.3 times more volatile than Voya Stock Index. It trades about -0.09 of its total potential returns per unit of risk. Voya Stock Index is currently generating about 0.06 per unit of volatility. If you would invest 1,992 in Voya Stock Index on September 24, 2024 and sell it today you would earn a total of 52.00 from holding Voya Stock Index or generate 2.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Adams Natural Resources vs. Voya Stock Index
Performance |
Timeline |
Adams Natural Resources |
Voya Stock Index |
Adams Natural and Voya Stock Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Adams Natural and Voya Stock
The main advantage of trading using opposite Adams Natural and Voya Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Natural position performs unexpectedly, Voya Stock 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 Stock will offset losses from the drop in Voya Stock's long position.Adams Natural vs. Tortoise Mlp Closed | Adams Natural vs. Flow Capital Corp | Adams Natural vs. Blackhawk Growth Corp | Adams Natural vs. MFS Investment Grade |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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