Correlation Between NioCorp Developments and Dana
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments 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 NioCorp Developments and Dana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NioCorp Developments Ltd and Dana Inc, you can compare the effects of market volatilities on NioCorp Developments 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 NioCorp Developments with a short position of Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Dana.
Diversification Opportunities for NioCorp Developments and Dana
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NioCorp and Dana is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc and NioCorp Developments 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 NioCorp Developments Ltd 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 NioCorp Developments i.e., NioCorp Developments and Dana go up and down completely randomly.
Pair Corralation between NioCorp Developments and Dana
Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to generate 1.12 times more return on investment than Dana. However, NioCorp Developments is 1.12 times more volatile than Dana Inc. It trades about 0.09 of its potential returns per unit of risk. Dana Inc is currently generating about -0.22 per unit of risk. If you would invest 183.00 in NioCorp Developments Ltd on January 11, 2025 and sell it today you would earn a total of 16.00 from holding NioCorp Developments Ltd or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NioCorp Developments Ltd vs. Dana Inc
Performance |
| Timeline |
| NioCorp Developments |
| Dana Inc |
NioCorp Developments and Dana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Dana
The main advantage of trading using opposite NioCorp Developments and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments 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.| NioCorp Developments vs. Zedge Inc | NioCorp Developments vs. Streamline Health Solutions | NioCorp Developments vs. Molson Coors Brewing | NioCorp Developments vs. FactSet Research Systems |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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