Correlation Between Dana and Compagnie Gnrale

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Can any of the company-specific risk be diversified away by investing in both Dana and Compagnie Gnrale 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 Compagnie Gnrale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Inc and Compagnie Gnrale des, you can compare the effects of market volatilities on Dana and Compagnie Gnrale 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 Compagnie Gnrale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana and Compagnie Gnrale.

Diversification Opportunities for Dana and Compagnie Gnrale

DanaCompagnieDiversified AwayDanaCompagnieDiversified Away100%
0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Dana and Compagnie is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Dana Inc and Compagnie Gnrale des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Gnrale des 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 Compagnie Gnrale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Gnrale des has no effect on the direction of Dana i.e., Dana and Compagnie Gnrale go up and down completely randomly.

Pair Corralation between Dana and Compagnie Gnrale

Considering the 90-day investment horizon Dana Inc is expected to generate 0.97 times more return on investment than Compagnie Gnrale. However, Dana Inc is 1.03 times less risky than Compagnie Gnrale. It trades about 0.12 of its potential returns per unit of risk. Compagnie Gnrale des is currently generating about -0.02 per unit of risk. If you would invest  985.00  in Dana Inc on September 15, 2024 and sell it today you would earn a total of  283.00  from holding Dana Inc or generate 28.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Dana Inc  vs.  Compagnie Gnrale des

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -20-100102030
JavaScript chart by amCharts 3.21.15DAN MGDDF
       Timeline  
Dana Inc 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Dana Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Dana displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec8910111213
Compagnie Gnrale des 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Compagnie Gnrale des has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Compagnie Gnrale is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec32343638404244

Dana and Compagnie Gnrale Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-12.79-9.58-6.37-3.160.03.446.8810.3113.75 0.0140.0160.0180.0200.022
JavaScript chart by amCharts 3.21.15DAN MGDDF
       Returns  

Pair Trading with Dana and Compagnie Gnrale

The main advantage of trading using opposite Dana and Compagnie Gnrale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana position performs unexpectedly, Compagnie Gnrale 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 Compagnie Gnrale will offset losses from the drop in Compagnie Gnrale's long position.
The idea behind Dana Inc and Compagnie Gnrale des 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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