Correlation Between Optec International and Dana

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

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

Diversification Opportunities for Optec International and Dana

0.0

Correlation Coefficient

Optec International  Dana

Pay attention - limited upside

The 3 months correlation between Optec and Dana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Optec International and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc and Optec International 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 Optec International 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 Optec International i.e., Optec International and Dana go up and down completely randomly.

Pair Corralation between Optec International and Dana

If you would invest  1,173  in Dana Inc on December 26, 2024 and sell it today you would earn a total of  292.00  from holding Dana Inc or generate 24.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Optec International  vs.  Dana Inc

Optec International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Optec International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Optec International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Dana Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dana Inc are ranked lower than 10 (%) 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.

Pair Trading with Optec International and Dana

The main advantage of trading using opposite Optec International and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optec International 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 Optec International 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.