Correlation Between Dana and Alta Global

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

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

Diversification Opportunities for Dana and Alta Global

-0.51

Correlation Coefficient

Dana  Alta Global

Excellent diversification

The 3 months correlation between Dana and Alta is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dana Inc and Alta Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Global 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 Alta Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Global Group has no effect on the direction of Dana i.e., Dana and Alta Global go up and down completely randomly.

Pair Corralation between Dana and Alta Global

Considering the 90-day investment horizon Dana Inc is expected to generate 0.34 times more return on investment than Alta Global. However, Dana Inc is 2.92 times less risky than Alta Global. It trades about 0.13 of its potential returns per unit of risk. Alta Global Group is currently generating about -0.08 per unit of risk. If you would invest  1,173  in Dana Inc on December 26, 2024 and sell it today you would earn a total of  292.00  from holding Dana Inc or generate 24.89% return on investment over 90 days.

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

Dana Inc  vs.  Alta Global Group

Dana Inc

Risk-Adjusted Performance

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.

Alta Global Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alta Global Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Dana and Alta Global

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

The idea behind Dana Inc and Alta Global 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.