Correlation Between Dana and Village Super
Can any of the company-specific risk be diversified away by investing in both Dana and Village Super 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 Village Super into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Inc and Village Super Market, you can compare the effects of market volatilities on Dana and Village Super 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 Village Super. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana and Village Super.
Diversification Opportunities for Dana and Village Super
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dana and Village is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dana Inc and Village Super Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Village Super Market 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 Village Super. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Village Super Market has no effect on the direction of Dana i.e., Dana and Village Super go up and down completely randomly.
Pair Corralation between Dana and Village Super
Considering the 90-day investment horizon Dana Inc is expected to generate 1.21 times more return on investment than Village Super. However, Dana is 1.21 times more volatile than Village Super Market. It trades about 0.49 of its potential returns per unit of risk. Village Super Market is currently generating about 0.15 per unit of risk. If you would invest 763.00 in Dana Inc on September 4, 2024 and sell it today you would earn a total of 370.00 from holding Dana Inc or generate 48.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dana Inc vs. Village Super Market
Performance |
| Timeline |
| Dana Inc |
| Village Super Market |
Dana and Village Super Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana and Village Super
The main advantage of trading using opposite Dana and Village Super positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana position performs unexpectedly, Village Super 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 Village Super will offset losses from the drop in Village Super's long position.The idea behind Dana Inc and Village Super Market 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.| Village Super vs. Ingles Markets Incorporated | Village Super vs. Natural Grocers by | Village Super vs. Grocery Outlet Holding | Village Super vs. Weis Markets |
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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