Correlation Between Dana and Quantumscape Corp
Can any of the company-specific risk be diversified away by investing in both Dana and Quantumscape Corp 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 Dana and Quantumscape Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Inc and Quantumscape Corp, you can compare the effects of market volatilities on Dana and Quantumscape Corp 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 Dana with a short position of Quantumscape Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana and Quantumscape Corp.
Diversification Opportunities for Dana and Quantumscape Corp
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dana and Quantumscape is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dana Inc and Quantumscape Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantumscape Corp and Dana 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 Dana Inc are associated (or correlated) with Quantumscape Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantumscape Corp has no effect on the direction of Dana i.e., Dana and Quantumscape Corp go up and down completely randomly.
Pair Corralation between Dana and Quantumscape Corp
Considering the 90-day investment horizon Dana Inc is expected to generate 0.53 times more return on investment than Quantumscape Corp. However, Dana Inc is 1.87 times less risky than Quantumscape Corp. It trades about 0.01 of its potential returns per unit of risk. Quantumscape Corp is currently generating about 0.0 per unit of risk. If you would invest 1,440 in Dana Inc on February 12, 2024 and sell it today you would lose (97.00) from holding Dana Inc or give up 6.74% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dana Inc vs. Quantumscape Corp
Performance |
Timeline |
Dana Inc |
Quantumscape Corp |
Dana and Quantumscape Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dana and Quantumscape Corp
The main advantage of trading using opposite Dana and Quantumscape Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana position performs unexpectedly, Quantumscape Corp 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 Quantumscape Corp will offset losses from the drop in Quantumscape Corp's long position.The idea behind Dana Inc and Quantumscape Corp 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.Quantumscape Corp vs. Mobileye Global Class | Quantumscape Corp vs. Innoviz Technologies | Quantumscape Corp vs. Aeva Technologies | Quantumscape Corp vs. Hyliion Holdings Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |