Correlation Between Loews Corp and Voya Financial

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

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

Diversification Opportunities for Loews Corp and Voya Financial

0.27

Correlation Coefficient

Loews Corp  Voya Financial

Modest diversification

The 3 months correlation between Loews and Voya is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp and Voya Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Financial and Loews Corp 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 Loews Corp 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 Loews Corp i.e., Loews Corp and Voya Financial go up and down completely randomly.

Pair Corralation between Loews Corp and Voya Financial

Taking into account the 90-day investment horizon Loews Corp is expected to generate 0.74 times more return on investment than Voya Financial. However, Loews Corp is 1.35 times less risky than Voya Financial. It trades about 0.05 of its potential returns per unit of risk. Voya Financial is currently generating about 0.0 per unit of risk. If you would invest  8,358  in Loews Corp on December 17, 2024 and sell it today you would earn a total of  284.00  from holding Loews Corp or generate 3.4% return on investment over 90 days.

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

Loews Corp  vs.  Voya Financial

Loews Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Loews Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Loews Corp is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Voya Financial

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Loews Corp and Voya Financial

The main advantage of trading using opposite Loews Corp and Voya Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loews Corp 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.

The idea behind Loews Corp and Voya Financial 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.