Correlation Between Dana and GILEAD
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By analyzing existing cross correlation between Dana Inc and GILEAD SCIENCES INC, you can compare the effects of market volatilities on Dana and GILEAD 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 GILEAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana and GILEAD.
Diversification Opportunities for Dana and GILEAD
Very weak diversification
The 3 months correlation between Dana and GILEAD is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dana Inc and GILEAD SCIENCES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GILEAD SCIENCES INC 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 GILEAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GILEAD SCIENCES INC has no effect on the direction of Dana i.e., Dana and GILEAD go up and down completely randomly.
Pair Corralation between Dana and GILEAD
Considering the 90-day investment horizon Dana Inc is expected to generate 7.3 times more return on investment than GILEAD. However, Dana is 7.3 times more volatile than GILEAD SCIENCES INC. It trades about 0.44 of its potential returns per unit of risk. GILEAD SCIENCES INC is currently generating about 0.01 per unit of risk. If you would invest 763.00 in Dana Inc on September 3, 2024 and sell it today you would earn a total of 237.00 from holding Dana Inc or generate 31.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Dana Inc vs. GILEAD SCIENCES INC
Performance |
| Timeline |
| Dana Inc |
| GILEAD SCIENCES INC |
Dana and GILEAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana and GILEAD
The main advantage of trading using opposite Dana and GILEAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana position performs unexpectedly, GILEAD 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 GILEAD will offset losses from the drop in GILEAD's long position.The idea behind Dana Inc and GILEAD SCIENCES 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.| GILEAD vs. Dana Inc | GILEAD vs. National CineMedia | GILEAD vs. Marine Products | GILEAD vs. Sphere Entertainment Co |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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