Correlation Between Dana Large and Bats Series
Can any of the company-specific risk be diversified away by investing in both Dana Large and Bats Series 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 Large and Bats Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Large Cap and Bats Series M, you can compare the effects of market volatilities on Dana Large and Bats Series 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 Large with a short position of Bats Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Bats Series.
Diversification Opportunities for Dana Large and Bats Series
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dana and Bats is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Bats Series M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bats Series M and Dana Large 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 Large Cap are associated (or correlated) with Bats Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bats Series M has no effect on the direction of Dana Large i.e., Dana Large and Bats Series go up and down completely randomly.
Pair Corralation between Dana Large and Bats Series
Assuming the 90 days horizon Dana Large Cap is expected to under-perform the Bats Series. In addition to that, Dana Large is 2.95 times more volatile than Bats Series M. It trades about -0.2 of its total potential returns per unit of risk. Bats Series M is currently generating about 0.33 per unit of volatility. If you would invest 825.00 in Bats Series M on December 5, 2024 and sell it today you would earn a total of 19.00 from holding Bats Series M or generate 2.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dana Large Cap vs. Bats Series M
Performance |
Timeline |
Dana Large Cap |
Bats Series M |
Dana Large and Bats Series Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dana Large and Bats Series
The main advantage of trading using opposite Dana Large and Bats Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large position performs unexpectedly, Bats Series 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 Bats Series will offset losses from the drop in Bats Series' long position.Dana Large vs. Fidelity Vertible Securities | Dana Large vs. Victory Incore Investment | Dana Large vs. Virtus Convertible | Dana Large vs. Putnam Vertible Securities |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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