Correlation Between FitLife Brands, and Dana

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Can any of the company-specific risk be diversified away by investing in both FitLife Brands, 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 FitLife Brands, and Dana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FitLife Brands, Common and Dana Inc, you can compare the effects of market volatilities on FitLife Brands, 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 FitLife Brands, with a short position of Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and Dana.

Diversification Opportunities for FitLife Brands, and Dana

FitLifeDanaDiversified AwayFitLifeDanaDiversified Away100%
0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between FitLife and Dana is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc and FitLife Brands, 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 FitLife Brands, 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 FitLife Brands, i.e., FitLife Brands, and Dana go up and down completely randomly.

Pair Corralation between FitLife Brands, and Dana

Given the investment horizon of 90 days FitLife Brands, Common is expected to under-perform the Dana. But the stock apears to be less risky and, when comparing its historical volatility, FitLife Brands, Common is 1.95 times less risky than Dana. The stock trades about -0.01 of its potential returns per unit of risk. The Dana Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  974.00  in Dana Inc on September 13, 2024 and sell it today you would earn a total of  326.00  from holding Dana Inc or generate 33.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

FitLife Brands, Common  vs.  Dana Inc

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -20-100102030
JavaScript chart by amCharts 3.21.15FTLF DAN
       Timeline  
FitLife Brands, Common 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days FitLife Brands, Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, FitLife Brands, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec29303132333435
Dana Inc 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
Good
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 fragile basic indicators, Dana displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec8910111213

FitLife Brands, and Dana Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.37-2.52-1.68-0.83-0.01390.811.642.473.314.14 0.030.040.050.060.070.080.09
JavaScript chart by amCharts 3.21.15FTLF DAN
       Returns  

Pair Trading with FitLife Brands, and Dana

The main advantage of trading using opposite FitLife Brands, and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, 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 FitLife Brands, 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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