Correlation Between Douglas Dynamics and Standard
Can any of the company-specific risk be diversified away by investing in both Douglas Dynamics and Standard 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 Douglas Dynamics and Standard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Douglas Dynamics and Standard Motor Products, you can compare the effects of market volatilities on Douglas Dynamics and Standard 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 Douglas Dynamics with a short position of Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Douglas Dynamics and Standard.
Diversification Opportunities for Douglas Dynamics and Standard
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Douglas and Standard is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Douglas Dynamics and Standard Motor Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Motor Products and Douglas Dynamics 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 Douglas Dynamics are associated (or correlated) with Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Motor Products has no effect on the direction of Douglas Dynamics i.e., Douglas Dynamics and Standard go up and down completely randomly.
Pair Corralation between Douglas Dynamics and Standard
Given the investment horizon of 90 days Douglas Dynamics is expected to generate 1.53 times less return on investment than Standard. But when comparing it to its historical volatility, Douglas Dynamics is 1.52 times less risky than Standard. It trades about 0.22 of its potential returns per unit of risk. Standard Motor Products is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,903 in Standard Motor Products on June 5, 2025 and sell it today you would earn a total of 1,042 from holding Standard Motor Products or generate 35.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Douglas Dynamics vs. Standard Motor Products
Performance |
| Timeline |
| Douglas Dynamics |
| Standard Motor Products |
Douglas Dynamics and Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Douglas Dynamics and Standard
The main advantage of trading using opposite Douglas Dynamics and Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Douglas Dynamics position performs unexpectedly, Standard 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 Standard will offset losses from the drop in Standard's long position.| Douglas Dynamics vs. Monro Muffler Brake | Douglas Dynamics vs. Motorcar Parts of | Douglas Dynamics vs. Standard Motor Products | Douglas Dynamics vs. Stoneridge |
| Standard vs. Dorman Products | Standard vs. Motorcar Parts of | Standard vs. Douglas Dynamics | Standard vs. Stoneridge |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |