Correlation Between Voya Stock and Crown

Can any of the company-specific risk be diversified away by investing in both Voya Stock and Crown 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 Crown 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 Crown Cork 7375, you can compare the effects of market volatilities on Voya Stock and Crown 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 Crown. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Stock and Crown.

Diversification Opportunities for Voya Stock and Crown

-0.4

Correlation Coefficient

Voya Stock  Crown

Very good diversification

The 3 months correlation between Voya and Crown is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Voya Stock Index and Crown Cork 7375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Cork 7375 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 Crown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Cork 7375 has no effect on the direction of Voya Stock i.e., Voya Stock and Crown go up and down completely randomly.

Pair Corralation between Voya Stock and Crown

Assuming the 90 days horizon Voya Stock Index is expected to under-perform the Crown. In addition to that, Voya Stock is 1.26 times more volatile than Crown Cork 7375. It trades about -0.1 of its total potential returns per unit of risk. Crown Cork 7375 is currently generating about -0.03 per unit of volatility. If you would invest  10,454  in Crown Cork 7375 on September 23, 2024 and sell it today you would lose (49.00) from holding Crown Cork 7375 or give up 0.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Voya Stock Index  vs.  Crown Cork 7375

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.

Crown Cork 7375

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Cork 7375 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Crown is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Voya Stock and Crown

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

The idea behind Voya Stock Index and Crown Cork 7375 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.