Correlation Between Dana Large and Csjxx

Can any of the company-specific risk be diversified away by investing in both Dana Large and Csjxx 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 Csjxx 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 Csjxx, you can compare the effects of market volatilities on Dana Large and Csjxx 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 Csjxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Csjxx.

Diversification Opportunities for Dana Large and Csjxx

-0.08

Correlation Coefficient

Dana Large  Csjxx

Good diversification

The 3 months correlation between Dana and Csjxx is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Csjxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Csjxx 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 Csjxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Csjxx has no effect on the direction of Dana Large i.e., Dana Large and Csjxx go up and down completely randomly.

Pair Corralation between Dana Large and Csjxx

Assuming the 90 days horizon Dana Large Cap is expected to under-perform the Csjxx. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dana Large Cap is 18.37 times less risky than Csjxx. The mutual fund trades about -0.24 of its potential returns per unit of risk. The Csjxx is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Csjxx on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Csjxx or generate 0.0% return on investment over 90 days.

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

Dana Large Cap  vs.  Csjxx

Dana Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dana Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Csjxx

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Csjxx are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Csjxx showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dana Large and Csjxx

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

The idea behind Dana Large Cap and Csjxx 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.