Correlation Between Dana and NGK Spark
Can any of the company-specific risk be diversified away by investing in both Dana and NGK Spark 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 NGK Spark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Inc and NGK Spark Plug, you can compare the effects of market volatilities on Dana and NGK Spark 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 NGK Spark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana and NGK Spark.
Diversification Opportunities for Dana and NGK Spark
Very good diversification
The 3 months correlation between Dana and NGK is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dana Inc and NGK Spark Plug in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGK Spark Plug 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 NGK Spark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGK Spark Plug has no effect on the direction of Dana i.e., Dana and NGK Spark go up and down completely randomly.
Pair Corralation between Dana and NGK Spark
If you would invest 3,023 in NGK Spark Plug on August 26, 2024 and sell it today you would earn a total of 0.00 from holding NGK Spark Plug or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Dana Inc vs. NGK Spark Plug
Performance |
| Timeline |
| Dana Inc |
| NGK Spark Plug |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dana and NGK Spark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana and NGK Spark
The main advantage of trading using opposite Dana and NGK Spark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana position performs unexpectedly, NGK Spark 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 NGK Spark will offset losses from the drop in NGK Spark's long position.The idea behind Dana Inc and NGK Spark Plug 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.| NGK Spark vs. DENSO | NGK Spark vs. Bridgestone Corp ADR | NGK Spark vs. American Axle Manufacturing | NGK Spark vs. Dana 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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