Correlation Between Tyson Foods and Dana
Can any of the company-specific risk be diversified away by investing in both Tyson Foods 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 Tyson Foods and Dana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Dana Inc, you can compare the effects of market volatilities on Tyson Foods 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 Tyson Foods with a short position of Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Dana.
Diversification Opportunities for Tyson Foods and Dana
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tyson and Dana is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc and Tyson Foods 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 Tyson Foods 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 Tyson Foods i.e., Tyson Foods and Dana go up and down completely randomly.
Pair Corralation between Tyson Foods and Dana
Considering the 90-day investment horizon Tyson Foods is expected to generate 0.54 times more return on investment than Dana. However, Tyson Foods is 1.84 times less risky than Dana. It trades about 0.06 of its potential returns per unit of risk. Dana Inc is currently generating about -0.05 per unit of risk. If you would invest 4,961 in Tyson Foods on August 28, 2024 and sell it today you would earn a total of 1,417 from holding Tyson Foods or generate 28.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods vs. Dana Inc
Performance |
| Timeline |
| Tyson Foods |
| Dana Inc |
Tyson Foods and Dana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Dana
The main advantage of trading using opposite Tyson Foods and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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.| Tyson Foods vs. Bellring Brands LLC | Tyson Foods vs. Ingredion Incorporated | Tyson Foods vs. Nomad Foods | Tyson Foods vs. Simply Good Foods |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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