Correlation Between Aeva Technologies and Dana
Can any of the company-specific risk be diversified away by investing in both Aeva Technologies 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 Aeva Technologies and Dana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeva Technologies and Dana Inc, you can compare the effects of market volatilities on Aeva Technologies 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 Aeva Technologies with a short position of Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeva Technologies and Dana.
Diversification Opportunities for Aeva Technologies and Dana
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aeva and Dana is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aeva Technologies and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc and Aeva Technologies 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 Aeva Technologies 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 Aeva Technologies i.e., Aeva Technologies and Dana go up and down completely randomly.
Pair Corralation between Aeva Technologies and Dana
Given the investment horizon of 90 days Aeva Technologies is expected to generate 0.98 times more return on investment than Dana. However, Aeva Technologies is 1.02 times less risky than Dana. It trades about 0.13 of its potential returns per unit of risk. Dana Inc is currently generating about 0.03 per unit of risk. If you would invest 421.00 in Aeva Technologies on August 30, 2024 and sell it today you would earn a total of 54.00 from holding Aeva Technologies or generate 12.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeva Technologies vs. Dana Inc
Performance |
| Timeline |
| Aeva Technologies |
| Dana Inc |
Aeva Technologies and Dana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeva Technologies and Dana
The main advantage of trading using opposite Aeva Technologies and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeva Technologies 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.| Aeva Technologies vs. Innoviz Technologies | Aeva Technologies vs. Hesai Group American | Aeva Technologies vs. Luminar Technologies | Aeva Technologies vs. Aeye Inc |
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 Stocks Directory module to find actively traded stocks across global markets.
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