Correlation Between Ultrashort Small and Dana Large

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

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

Diversification Opportunities for Ultrashort Small and Dana Large

-0.44

Correlation Coefficient

Ultrashort Small  Dana Large

Very good diversification

The 3 months correlation between Ultrashort and Dana is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ultrashort Small Cap Profund and Dana Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Large Cap and Ultrashort Small 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 Ultrashort Small Cap Profund are associated (or correlated) with Dana Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Large Cap has no effect on the direction of Ultrashort Small i.e., Ultrashort Small and Dana Large go up and down completely randomly.

Pair Corralation between Ultrashort Small and Dana Large

Assuming the 90 days horizon Ultrashort Small Cap Profund is expected to under-perform the Dana Large. In addition to that, Ultrashort Small is 2.19 times more volatile than Dana Large Cap. It trades about -0.03 of its total potential returns per unit of risk. Dana Large Cap is currently generating about 0.04 per unit of volatility. If you would invest  1,816  in Dana Large Cap on October 8, 2024 and sell it today you would earn a total of  364.00  from holding Dana Large Cap or generate 20.04% return on investment over 90 days.

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

Ultrashort Small Cap Profund  vs.  Dana Large Cap

Ultrashort Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ultrashort Small Cap Profund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

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.

Pair Trading with Ultrashort Small and Dana Large

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

The idea behind Ultrashort Small Cap Profund and Dana Large Cap 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.