Correlation Between Fly E and Dana

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

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

Diversification Opportunities for Fly E and Dana

-0.44

Correlation Coefficient

Fly E  Dana

Very good diversification

The 3 months correlation between Fly and Dana is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fly E Group, Common and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc and Fly E 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 Fly E Group, Common 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 Fly E i.e., Fly E and Dana go up and down completely randomly.

Pair Corralation between Fly E and Dana

Given the investment horizon of 90 days Fly E Group, Common is expected to under-perform the Dana. In addition to that, Fly E is 3.68 times more volatile than Dana Inc. It trades about -0.08 of its total potential returns per unit of risk. Dana Inc is currently generating about -0.01 per unit of volatility. If you would invest  1,488  in Dana Inc on September 25, 2024 and sell it today you would lose (339.00) from holding Dana Inc or give up 22.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	28.02%
Values	Daily Returns

Fly E Group, Common  vs.  Dana Inc

Fly E Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fly E Group, Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Fly E is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Dana Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dana Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Dana displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fly E and Dana

The main advantage of trading using opposite Fly E and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fly E 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 Fly E Group, Common 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.