Correlation Between Alphabet and Voya Financial
Can any of the company-specific risk be diversified away by investing in both Alphabet 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 Alphabet and Voya Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and Voya Financial, you can compare the effects of market volatilities on Alphabet 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 Alphabet with a short position of Voya Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Voya Financial.
Diversification Opportunities for Alphabet and Voya Financial
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alphabet and Voya is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Voya Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Financial and Alphabet 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 Alphabet Inc Class C 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 Alphabet i.e., Alphabet and Voya Financial go up and down completely randomly.
Pair Corralation between Alphabet and Voya Financial
Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 2.55 times more return on investment than Voya Financial. However, Alphabet is 2.55 times more volatile than Voya Financial. It trades about 0.34 of its potential returns per unit of risk. Voya Financial is currently generating about -0.32 per unit of risk. If you would invest 16,638 in Alphabet Inc Class C on September 23, 2024 and sell it today you would earn a total of 2,658 from holding Alphabet Inc Class C or generate 15.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Alphabet Inc Class C vs. Voya Financial
Performance |
Timeline |
Alphabet Class C |
Voya Financial |
Alphabet and Voya Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alphabet and Voya Financial
The main advantage of trading using opposite Alphabet and Voya Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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.Alphabet vs. Outbrain | Alphabet vs. Perion Network | Alphabet vs. Taboola Ltd Warrant | Alphabet vs. Fiverr International |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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