Correlation Between Monro Muffler and Dana
Can any of the company-specific risk be diversified away by investing in both Monro Muffler and Dana 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 Monro Muffler and Dana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monro Muffler Brake and Dana Inc, you can compare the effects of market volatilities on Monro Muffler and Dana 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 Monro Muffler with a short position of Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monro Muffler and Dana.
Diversification Opportunities for Monro Muffler and Dana
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Monro and Dana is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Monro Muffler Brake and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc and Monro Muffler 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 Monro Muffler Brake are associated (or correlated) with Dana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Inc has no effect on the direction of Monro Muffler i.e., Monro Muffler and Dana go up and down completely randomly.
Pair Corralation between Monro Muffler and Dana
Given the investment horizon of 90 days Monro Muffler Brake is expected to under-perform the Dana. But the stock apears to be less risky and, when comparing its historical volatility, Monro Muffler Brake is 1.32 times less risky than Dana. The stock trades about -0.13 of its potential returns per unit of risk. The Dana Inc is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,292 in Dana Inc on November 18, 2024 and sell it today you would earn a total of 343.00 from holding Dana Inc or generate 26.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monro Muffler Brake vs. Dana Inc
Performance |
| Timeline |
| Monro Muffler Brake |
| Dana Inc |
Monro Muffler and Dana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monro Muffler and Dana
The main advantage of trading using opposite Monro Muffler and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monro Muffler position performs unexpectedly, Dana 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 will offset losses from the drop in Dana's long position.| Monro Muffler vs. Motorcar Parts of | Monro Muffler vs. Standard Motor Products | Monro Muffler vs. Stoneridge | Monro Muffler vs. Douglas Dynamics |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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