Correlation Between Dana Large and Optimum Small-mid
Can any of the company-specific risk be diversified away by investing in both Dana Large and Optimum Small-mid 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 Optimum Small-mid 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 Optimum Small Mid Cap, you can compare the effects of market volatilities on Dana Large and Optimum Small-mid 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 Optimum Small-mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Optimum Small-mid.
Diversification Opportunities for Dana Large and Optimum Small-mid
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dana and Optimum is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Optimum Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimum Small Mid 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 Optimum Small-mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimum Small Mid has no effect on the direction of Dana Large i.e., Dana Large and Optimum Small-mid go up and down completely randomly.
Pair Corralation between Dana Large and Optimum Small-mid
Assuming the 90 days horizon Dana Large Cap is expected to generate 0.69 times more return on investment than Optimum Small-mid. However, Dana Large Cap is 1.45 times less risky than Optimum Small-mid. It trades about 0.13 of its potential returns per unit of risk. Optimum Small Mid Cap is currently generating about 0.06 per unit of risk. If you would invest 1,886 in Dana Large Cap on August 31, 2024 and sell it today you would earn a total of 824.00 from holding Dana Large Cap or generate 43.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Dana Large Cap vs. Optimum Small Mid Cap
Performance |
| Timeline |
| Dana Large Cap |
| Optimum Small Mid |
Dana Large and Optimum Small-mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and Optimum Small-mid
The main advantage of trading using opposite Dana Large and Optimum Small-mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large position performs unexpectedly, Optimum Small-mid 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 Optimum Small-mid will offset losses from the drop in Optimum Small-mid's long position.| Dana Large vs. T Rowe Price | Dana Large vs. T Rowe Price | Dana Large vs. Touchstone Small Cap | Dana Large vs. Qs Growth Fund |
| Optimum Small-mid vs. Dana Large Cap | Optimum Small-mid vs. Large Cap Growth Profund | Optimum Small-mid vs. Fidelity Series 1000 | Optimum Small-mid vs. Jhancock Disciplined Value |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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