Correlation Between Dana Large and Fpa Queens

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

Diversification Opportunities for Dana Large and Fpa Queens

-0.1

Correlation Coefficient

Dana Large  Fpa Queens

Good diversification

The 3 months correlation between Dana and Fpa is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Fpa Queens Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fpa Queens Road 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 Fpa Queens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fpa Queens Road has no effect on the direction of Dana Large i.e., Dana Large and Fpa Queens go up and down completely randomly.

Pair Corralation between Dana Large and Fpa Queens

Assuming the 90 days horizon Dana Large Cap is expected to under-perform the Fpa Queens. In addition to that, Dana Large is 3.04 times more volatile than Fpa Queens Road. It trades about -0.14 of its total potential returns per unit of risk. Fpa Queens Road is currently generating about -0.01 per unit of volatility. If you would invest  3,872  in Fpa Queens Road on December 19, 2024 and sell it today you would lose (31.00) from holding Fpa Queens Road or give up 0.8% of portfolio value over 90 days.

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

Dana Large Cap  vs.  Fpa Queens Road

Dana Large Cap

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Fpa Queens Road

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fpa Queens Road has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fpa Queens is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dana Large and Fpa Queens

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

The idea behind Dana Large Cap and Fpa Queens Road 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..