Correlation Between Dana Large and Muzinich
Can any of the company-specific risk be diversified away by investing in both Dana Large and Muzinich 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 Muzinich 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 Muzinich High Yield, you can compare the effects of market volatilities on Dana Large and Muzinich 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 Muzinich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Muzinich.
Diversification Opportunities for Dana Large and Muzinich
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dana and Muzinich is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Muzinich High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muzinich High Yield 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 Muzinich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muzinich High Yield has no effect on the direction of Dana Large i.e., Dana Large and Muzinich go up and down completely randomly.
Pair Corralation between Dana Large and Muzinich
Assuming the 90 days horizon Dana Large Cap is expected to generate 3.48 times more return on investment than Muzinich. However, Dana Large is 3.48 times more volatile than Muzinich High Yield. It trades about 0.1 of its potential returns per unit of risk. Muzinich High Yield is currently generating about 0.13 per unit of risk. If you would invest 1,811 in Dana Large Cap on September 4, 2024 and sell it today you would earn a total of 902.00 from holding Dana Large Cap or generate 49.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dana Large Cap vs. Muzinich High Yield
Performance |
| Timeline |
| Dana Large Cap |
| Muzinich High Yield |
Dana Large and Muzinich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and Muzinich
The main advantage of trading using opposite Dana Large and Muzinich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large position performs unexpectedly, Muzinich 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 Muzinich will offset losses from the drop in Muzinich's long position.| Dana Large vs. Nationwide Global Equity | Dana Large vs. Principal Lifetime Hybrid | Dana Large vs. Growth Strategy Fund | Dana Large vs. Semiconductor Ultrasector Profund |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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