Correlation Between Dana Large and Large-cap Value
Can any of the company-specific risk be diversified away by investing in both Dana Large and Large-cap Value 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 Large and Large-cap Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Large Cap and Large Cap Value Profund, you can compare the effects of market volatilities on Dana Large and Large-cap Value 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 Large with a short position of Large-cap Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Large-cap Value.
Diversification Opportunities for Dana Large and Large-cap Value
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dana and Large-cap is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Large Cap Value Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Value and Dana Large 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 Large Cap are associated (or correlated) with Large-cap Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Value has no effect on the direction of Dana Large i.e., Dana Large and Large-cap Value go up and down completely randomly.
Pair Corralation between Dana Large and Large-cap Value
Assuming the 90 days horizon Dana Large Cap is expected to generate 1.3 times more return on investment than Large-cap Value. However, Dana Large is 1.3 times more volatile than Large Cap Value Profund. It trades about 0.1 of its potential returns per unit of risk. Large Cap Value Profund is currently generating about 0.11 per unit of risk. If you would invest 2,303 in Dana Large Cap on August 27, 2024 and sell it today you would earn a total of 386.00 from holding Dana Large Cap or generate 16.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dana Large Cap vs. Large Cap Value Profund
Performance |
| Timeline |
| Dana Large Cap |
| Large Cap Value |
Dana Large and Large-cap Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and Large-cap Value
The main advantage of trading using opposite Dana Large and Large-cap Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large position performs unexpectedly, Large-cap Value 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 Large-cap Value will offset losses from the drop in Large-cap Value's long position.| Dana Large vs. Dana Large Cap | Dana Large vs. Dana Epiphany Esg | Dana Large vs. Dana Small Cap | Dana Large vs. Goldman Sachs Tax Advantaged |
| Large-cap Value vs. Short Real Estate | Large-cap Value vs. Short Real Estate | Large-cap Value vs. Ultrashort Mid Cap Profund | Large-cap Value vs. Ultrashort Mid Cap Profund |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |