Correlation Between Falcon Focus and Dana Small

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

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

Diversification Opportunities for Falcon Focus and Dana Small

0.0

Correlation Coefficient

Falcon Focus  Dana Small

Pay attention - limited upside

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

Pair Corralation between Falcon Focus and Dana Small

If you would invest  1,482  in Dana Small Cap on September 17, 2024 and sell it today you would earn a total of  54.00  from holding Dana Small Cap or generate 3.64% return on investment over 90 days.

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

Falcon Focus Scv  vs.  Dana Small Cap

Falcon Focus Scv

Risk-Adjusted Performance

0 of 100

Very Weak

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

Dana Small Cap

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dana Small Cap are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Dana Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Falcon Focus and Dana Small

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

The idea behind Falcon Focus Scv and Dana Small 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 Transaction History module to view history of all your transactions and understand their impact on performance.