Correlation Between Voya Stock and Prudential California

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

Diversification Opportunities for Voya Stock and Prudential California

0.46

Correlation Coefficient

Voya Stock  Prudential California

Very weak diversification

The 3 months correlation between Voya and Prudential is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Voya Stock Index and Prudential California Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential California 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 Prudential California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential California has no effect on the direction of Voya Stock i.e., Voya Stock and Prudential California go up and down completely randomly.

Pair Corralation between Voya Stock and Prudential California

Assuming the 90 days horizon Voya Stock Index is expected to generate 8.76 times more return on investment than Prudential California. However, Voya Stock is 8.76 times more volatile than Prudential California Muni. It trades about 0.07 of its potential returns per unit of risk. Prudential California Muni is currently generating about 0.16 per unit of risk. If you would invest  2,056  in Voya Stock Index on September 16, 2025 and sell it today you would earn a total of  70.00  from holding Voya Stock Index or generate 3.4% return on investment over 90 days.

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

Voya Stock Index  vs.  Prudential California Muni

Voya Stock Index

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Stock Index are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Voya Stock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Prudential California

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential California Muni are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Prudential California 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 Prudential California

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

The idea behind Voya Stock Index and Prudential California Muni 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.