Correlation Between PHINIA and Dana

Can any of the company-specific risk be diversified away by investing in both PHINIA 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 PHINIA and Dana into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PHINIA Inc and Dana Inc, you can compare the effects of market volatilities on PHINIA 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 PHINIA with a short position of Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHINIA and Dana.

Diversification Opportunities for PHINIA and Dana

-0.71

Correlation Coefficient

PHINIA  Dana

Pay attention - limited upside

The 3 months correlation between PHINIA and Dana is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding PHINIA Inc and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc and PHINIA 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 PHINIA Inc 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 PHINIA i.e., PHINIA and Dana go up and down completely randomly.

Pair Corralation between PHINIA and Dana

Given the investment horizon of 90 days PHINIA Inc is expected to under-perform the Dana. In addition to that, PHINIA is 1.16 times more volatile than Dana Inc. It trades about -0.03 of its total potential returns per unit of risk. Dana Inc is currently generating about -0.03 per unit of volatility. If you would invest  1,264  in Dana Inc on January 30, 2024 and sell it today you would lose (16.00) from holding Dana Inc or give up 1.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

PHINIA Inc  vs.  Dana Inc

PHINIA Inc

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PHINIA Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward indicators, PHINIA displayed solid returns over the last few months and may actually be approaching a breakup point.

Dana Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dana Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with PHINIA and Dana

The main advantage of trading using opposite PHINIA and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHINIA 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 PHINIA Inc 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.