Correlation Between Dana and Hamilton Insurance

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

By analyzing existing cross correlation between Dana Inc and Hamilton Insurance Group,, you can compare the effects of market volatilities on Dana and Hamilton Insurance 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 Dana with a short position of Hamilton Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana and Hamilton Insurance.

Diversification Opportunities for Dana and Hamilton Insurance

0.64

Correlation Coefficient

Dana  Hamilton Insurance

Poor diversification

The 3 months correlation between Dana and Hamilton is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dana Inc and Hamilton Insurance Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Insurance Group, and Dana 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 Dana Inc are associated (or correlated) with Hamilton Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Insurance Group, has no effect on the direction of Dana i.e., Dana and Hamilton Insurance go up and down completely randomly.

Pair Corralation between Dana and Hamilton Insurance

Considering the 90-day investment horizon Dana is expected to generate 2.67 times less return on investment than Hamilton Insurance. In addition to that, Dana is 1.29 times more volatile than Hamilton Insurance Group,. It trades about 0.01 of its total potential returns per unit of risk. Hamilton Insurance Group, is currently generating about 0.05 per unit of volatility. If you would invest  1,500  in Hamilton Insurance Group, on October 24, 2024 and sell it today you would earn a total of  409.00  from holding Hamilton Insurance Group, or generate 27.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	72.99%
Values	Daily Returns

Dana Inc  vs.  Hamilton Insurance Group,

Dana Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dana Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Dana displayed solid returns over the last few months and may actually be approaching a breakup point.

Hamilton Insurance Group,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Insurance Group, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Hamilton Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Dana and Hamilton Insurance

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

The idea behind Dana Inc and Hamilton Insurance Group, 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.