Correlation Between Westport Fuel and Dana
Can any of the company-specific risk be diversified away by investing in both Westport Fuel 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 Westport Fuel and Dana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westport Fuel Systems and Dana Inc, you can compare the effects of market volatilities on Westport Fuel 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 Westport Fuel with a short position of Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westport Fuel and Dana.
Diversification Opportunities for Westport Fuel and Dana
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Westport and Dana is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Westport Fuel Systems and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc and Westport Fuel 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 Westport Fuel Systems 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 Westport Fuel i.e., Westport Fuel and Dana go up and down completely randomly.
Pair Corralation between Westport Fuel and Dana
Given the investment horizon of 90 days Westport Fuel is expected to generate 2.31 times less return on investment than Dana. But when comparing it to its historical volatility, Westport Fuel Systems is 1.88 times less risky than Dana. It trades about 0.21 of its potential returns per unit of risk. Dana Inc is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 830.00 in Dana Inc on August 31, 2024 and sell it today you would earn a total of 182.00 from holding Dana Inc or generate 21.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westport Fuel Systems vs. Dana Inc
Performance |
| Timeline |
| Westport Fuel Systems |
| Dana Inc |
Westport Fuel and Dana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westport Fuel and Dana
The main advantage of trading using opposite Westport Fuel and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westport Fuel 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.| Westport Fuel vs. Foresight Autonomous Holdings | Westport Fuel vs. Hyliion Holdings Corp | Westport Fuel vs. American Axle Manufacturing | Westport Fuel vs. Gentex |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |