Correlation Between FitLife Brands, and Dana
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
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FitLife Brands, Common vs. Dana Inc
Performance |
Timeline |
FitLife Brands, Common |
Dana Inc |
FitLife Brands, and Dana Volatility Contrast
Predicted Return Density |
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.FitLife Brands, vs. Noble Romans | ||
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Check out your portfolio center.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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