Correlation Between Dana and 90932LAH0

Can any of the company-specific risk be diversified away by investing in both Dana and 90932LAH0 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 90932LAH0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dana Inc and US90932LAH06, you can compare the effects of market volatilities on Dana and 90932LAH0 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 90932LAH0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana and 90932LAH0.

Diversification Opportunities for Dana and 90932LAH0

-0.3

Correlation Coefficient

Dana  90932LAH0

Very good diversification

The 3 months correlation between Dana and 90932LAH0 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dana Inc and US90932LAH06 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US90932LAH06 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 90932LAH0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US90932LAH06 has no effect on the direction of Dana i.e., Dana and 90932LAH0 go up and down completely randomly.

Pair Corralation between Dana and 90932LAH0

Considering the 90-day investment horizon Dana Inc is expected to generate 7.75 times more return on investment than 90932LAH0. However, Dana is 7.75 times more volatile than US90932LAH06. It trades about 0.23 of its potential returns per unit of risk. US90932LAH06 is currently generating about 0.05 per unit of risk. If you would invest  856.00  in Dana Inc on October 11, 2024 and sell it today you would earn a total of  294.00  from holding Dana Inc or generate 34.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.12%
Values	Daily Returns

Dana Inc  vs.  US90932LAH06

Dana Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dana Inc are ranked lower than 4 (%) 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.

US90932LAH06

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in US90932LAH06 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 90932LAH0 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dana and 90932LAH0

The main advantage of trading using opposite Dana and 90932LAH0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana position performs unexpectedly, 90932LAH0 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 90932LAH0 will offset losses from the drop in 90932LAH0's long position.

The idea behind Dana Inc and US90932LAH06 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 Stocks Directory module to find actively traded stocks across global markets.