Correlation Between Dana Large and Mid Cap
Can any of the company-specific risk be diversified away by investing in both Dana Large and Mid Cap 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 Mid Cap 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 Mid Cap Value Profund, you can compare the effects of market volatilities on Dana Large and Mid Cap 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 Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Mid Cap.
Diversification Opportunities for Dana Large and Mid Cap
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dana and Mid is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Mid Cap Value Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid 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 Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Value has no effect on the direction of Dana Large i.e., Dana Large and Mid Cap go up and down completely randomly.
Pair Corralation between Dana Large and Mid Cap
Assuming the 90 days horizon Dana Large Cap is expected to generate 0.78 times more return on investment than Mid Cap. However, Dana Large Cap is 1.28 times less risky than Mid Cap. It trades about 0.14 of its potential returns per unit of risk. Mid Cap Value Profund is currently generating about 0.07 per unit of risk. If you would invest 1,980 in Dana Large Cap on September 23, 2024 and sell it today you would earn a total of 674.00 from holding Dana Large Cap or generate 34.04% 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. Mid Cap Value Profund
Performance |
| Timeline |
| Dana Large Cap |
| Mid Cap Value |
Dana Large and Mid Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and Mid Cap
The main advantage of trading using opposite Dana Large and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large position performs unexpectedly, Mid Cap 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 Mid Cap will offset losses from the drop in Mid Cap's long position.| Dana Large vs. Dana Small Cap | Dana Large vs. Fidelity Contrafund | Dana Large vs. Largecap Sp 500 | Dana Large vs. Kinetics Paradigm Fund |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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