Correlation Between Dana and Continental Resources
Can any of the company-specific risk be diversified away by investing in both Dana and Continental Resources 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 Dana and Continental Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Inc and Continental Resources, you can compare the effects of market volatilities on Dana and Continental Resources 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 Dana with a short position of Continental Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana and Continental Resources.
Diversification Opportunities for Dana and Continental Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dana and Continental is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dana Inc and Continental Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Resources and Dana 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 Dana Inc are associated (or correlated) with Continental Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Resources has no effect on the direction of Dana i.e., Dana and Continental Resources go up and down completely randomly.
Pair Corralation between Dana and Continental Resources
If you would invest 763.00 in Dana Inc on September 5, 2024 and sell it today you would earn a total of 447.00 from holding Dana Inc or generate 58.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Dana Inc vs. Continental Resources
Performance |
| Timeline |
| Dana Inc |
| Continental Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dana and Continental Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana and Continental Resources
The main advantage of trading using opposite Dana and Continental Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana position performs unexpectedly, Continental Resources 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 Continental Resources will offset losses from the drop in Continental Resources' long position.The idea behind Dana Inc and Continental Resources 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.| Continental Resources vs. Global Ship Lease | Continental Resources vs. Air Lease | Continental Resources vs. ON Semiconductor | Continental Resources vs. Elmos Semiconductor SE |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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