Correlation Between Dana and FactSet Research
Can any of the company-specific risk be diversified away by investing in both Dana and FactSet Research 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 FactSet Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Inc and FactSet Research Systems, you can compare the effects of market volatilities on Dana and FactSet Research 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 FactSet Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana and FactSet Research.
Diversification Opportunities for Dana and FactSet Research
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dana and FactSet is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dana Inc and FactSet Research Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FactSet Research Systems 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 FactSet Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FactSet Research Systems has no effect on the direction of Dana i.e., Dana and FactSet Research go up and down completely randomly.
Pair Corralation between Dana and FactSet Research
Considering the 90-day investment horizon Dana Inc is expected to generate 4.38 times more return on investment than FactSet Research. However, Dana is 4.38 times more volatile than FactSet Research Systems. It trades about 0.09 of its potential returns per unit of risk. FactSet Research Systems is currently generating about 0.08 per unit of risk. If you would invest 1,035 in Dana Inc on September 19, 2024 and sell it today you would earn a total of 211.00 from holding Dana Inc or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dana Inc vs. FactSet Research Systems
Performance |
| Timeline |
| Dana Inc |
| FactSet Research Systems |
Dana and FactSet Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana and FactSet Research
The main advantage of trading using opposite Dana and FactSet Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana position performs unexpectedly, FactSet Research 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 FactSet Research will offset losses from the drop in FactSet Research's long position.The idea behind Dana Inc and FactSet Research Systems 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.| FactSet Research vs. Dun Bradstreet Holdings | FactSet Research vs. Moodys | FactSet Research vs. MSCI Inc | FactSet Research vs. Intercontinental Exchange |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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