Correlation Between 29670VAA7 and Dana

Can any of the company-specific risk be diversified away by investing in both 29670VAA7 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 29670VAA7 and Dana into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EPRT 295 15 JUL 31 and Dana Inc, you can compare the effects of market volatilities on 29670VAA7 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 29670VAA7 with a short position of Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of 29670VAA7 and Dana.

Diversification Opportunities for 29670VAA7 and Dana

-0.01

Correlation Coefficient

29670VAA7  Dana

Good diversification

The 3 months correlation between 29670VAA7 and Dana is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding EPRT 295 15 JUL 31 and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc and 29670VAA7 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 EPRT 295 15 JUL 31 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 29670VAA7 i.e., 29670VAA7 and Dana go up and down completely randomly.

Pair Corralation between 29670VAA7 and Dana

Assuming the 90 days trading horizon EPRT 295 15 JUL 31 is expected to under-perform the Dana. But the bond apears to be less risky and, when comparing its historical volatility, EPRT 295 15 JUL 31 is 1.53 times less risky than Dana. The bond trades about -0.06 of its potential returns per unit of risk. The Dana Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,038  in Dana Inc on September 24, 2024 and sell it today you would earn a total of  111.00  from holding Dana Inc or generate 10.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.56%
Values	Daily Returns

EPRT 295 15 JUL 31  vs.  Dana Inc

EPRT 295 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EPRT 295 15 JUL 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for EPRT 295 15 JUL 31 investors.

Dana Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dana Inc are ranked lower than 4 (%) 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 29670VAA7 and Dana

The main advantage of trading using opposite 29670VAA7 and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 29670VAA7 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 EPRT 295 15 JUL 31 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.