Correlation Between Adtalem Global and Dana

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

By analyzing existing cross correlation between Adtalem Global Education and Dana Inc, you can compare the effects of market volatilities on Adtalem Global and Dana 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 Adtalem Global with a short position of Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adtalem Global and Dana.

Diversification Opportunities for Adtalem Global and Dana

0.0

Correlation Coefficient

Adtalem Global  Dana

Pay attention - limited upside

The 3 months correlation between Adtalem and Dana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Adtalem Global Education and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc and Adtalem Global 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 Adtalem Global Education are associated (or correlated) with Dana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Inc has no effect on the direction of Adtalem Global i.e., Adtalem Global and Dana go up and down completely randomly.

Pair Corralation between Adtalem Global and Dana

If you would invest  6,700  in Adtalem Global Education on October 24, 2024 and sell it today you would earn a total of  2,800  from holding Adtalem Global Education or generate 41.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Adtalem Global Education  vs.  Dana Inc

Adtalem Global Education

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Adtalem Global Education are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Adtalem Global unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dana Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dana Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dana is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Adtalem Global and Dana

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

The idea behind Adtalem Global Education and Dana Inc 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.