Correlation Between Gentex and Dana
Can any of the company-specific risk be diversified away by investing in both Gentex 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 Gentex and Dana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentex and Dana Inc, you can compare the effects of market volatilities on Gentex 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 Gentex with a short position of Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and Dana.
Diversification Opportunities for Gentex and Dana
Excellent diversification
The 3 months correlation between Gentex and Dana is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc and Gentex 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 Gentex 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 Gentex i.e., Gentex and Dana go up and down completely randomly.
Pair Corralation between Gentex and Dana
Given the investment horizon of 90 days Gentex is expected to under-perform the Dana. But the stock apears to be less risky and, when comparing its historical volatility, Gentex is 2.1 times less risky than Dana. The stock trades about -0.34 of its potential returns per unit of risk. The Dana Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,214 in Dana Inc on January 20, 2024 and sell it today you would earn a total of 1.00 from holding Dana Inc or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gentex vs. Dana Inc
Performance |
| Timeline |
| Gentex |
| Dana Inc |
Gentex and Dana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentex and Dana
The main advantage of trading using opposite Gentex and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex 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.The idea behind Gentex and Dana Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |