Correlation Between Large-cap Value and Dana Large
Can any of the company-specific risk be diversified away by investing in both Large-cap Value and Dana Large 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 Large-cap Value and Dana Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Large Cap Value Profund and Dana Large Cap, you can compare the effects of market volatilities on Large-cap Value and Dana Large 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 Large-cap Value with a short position of Dana Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Large-cap Value and Dana Large.
Diversification Opportunities for Large-cap Value and Dana Large
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LARGE-CAP and Dana is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Large Cap Value Profund and Dana Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Large Cap and Large-cap Value 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 Large Cap Value Profund are associated (or correlated) with Dana Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Large Cap has no effect on the direction of Large-cap Value i.e., Large-cap Value and Dana Large go up and down completely randomly.
Pair Corralation between Large-cap Value and Dana Large
Assuming the 90 days horizon Large-cap Value is expected to generate 1.08 times less return on investment than Dana Large. But when comparing it to its historical volatility, Large Cap Value Profund is 1.33 times less risky than Dana Large. It trades about 0.13 of its potential returns per unit of risk. Dana Large Cap is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,394 in Dana Large Cap on August 24, 2024 and sell it today you would earn a total of 286.00 from holding Dana Large Cap or generate 11.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Large Cap Value Profund vs. Dana Large Cap
Performance |
| Timeline |
| Large Cap Value |
| Dana Large Cap |
Large-cap Value and Dana Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Large-cap Value and Dana Large
The main advantage of trading using opposite Large-cap Value and Dana Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Large-cap Value position performs unexpectedly, Dana Large 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 Dana Large will offset losses from the drop in Dana Large's long position.| Large-cap Value vs. Vanguard Small Cap Value | Large-cap Value vs. Vanguard Mid Cap Value | Large-cap Value vs. Vanguard Small Cap Index | Large-cap Value vs. Vanguard Emerging Markets |
| Dana Large vs. Valic Company I | Dana Large vs. Ultrasmall Cap Profund Ultrasmall Cap | Dana Large vs. Small Cap Value Series | Dana Large vs. Pace Smallmedium 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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