Correlation Between WT Offshore and Dana
Can any of the company-specific risk be diversified away by investing in both WT Offshore 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 WT Offshore and Dana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WT Offshore and Dana Inc, you can compare the effects of market volatilities on WT Offshore 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 WT Offshore with a short position of Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of WT Offshore and Dana.
Diversification Opportunities for WT Offshore and Dana
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between WTI and Dana is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding WT Offshore and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc and WT Offshore 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 WT Offshore 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 WT Offshore i.e., WT Offshore and Dana go up and down completely randomly.
Pair Corralation between WT Offshore and Dana
Considering the 90-day investment horizon WT Offshore is expected to under-perform the Dana. In addition to that, WT Offshore is 1.08 times more volatile than Dana Inc. It trades about -0.06 of its total potential returns per unit of risk. Dana Inc is currently generating about 0.01 per unit of volatility. If you would invest 1,375 in Dana Inc on September 12, 2024 and sell it today you would lose (75.00) from holding Dana Inc or give up 5.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WT Offshore vs. Dana Inc
Performance |
| Timeline |
| WT Offshore |
| Dana Inc |
WT Offshore and Dana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WT Offshore and Dana
The main advantage of trading using opposite WT Offshore and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WT Offshore 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.| WT Offshore vs. Evolution Petroleum | WT Offshore vs. Ring Energy | WT Offshore vs. Gran Tierra Energy | WT Offshore vs. Permian Resources |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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