Correlation Between Dana and Oriental Rise

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

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

Diversification Opportunities for Dana and Oriental Rise

-0.11

Correlation Coefficient

Dana  Oriental Rise

Good diversification

The 3 months correlation between Dana and Oriental is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dana Inc and Oriental Rise Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Rise Holdings 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 Oriental Rise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Rise Holdings has no effect on the direction of Dana i.e., Dana and Oriental Rise go up and down completely randomly.

Pair Corralation between Dana and Oriental Rise

Considering the 90-day investment horizon Dana Inc is expected to under-perform the Oriental Rise. But the stock apears to be less risky and, when comparing its historical volatility, Dana Inc is 30.38 times less risky than Oriental Rise. The stock trades about -0.01 of its potential returns per unit of risk. The Oriental Rise Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  600.00  in Oriental Rise Holdings on October 10, 2024 and sell it today you would lose (430.00) from holding Oriental Rise Holdings or give up 71.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	11.31%
Values	Daily Returns

Dana Inc  vs.  Oriental Rise Holdings

Dana Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dana Inc are ranked lower than 5 (%) 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.

Oriental Rise Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oriental Rise Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Oriental Rise unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dana and Oriental Rise

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

The idea behind Dana Inc and Oriental Rise Holdings 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.