Correlation Between Diamond Hill and Associated Capital
Can any of the company-specific risk be diversified away by investing in both Diamond Hill and Associated Capital 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 Diamond Hill and Associated Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Hill Investment and Associated Capital Group, you can compare the effects of market volatilities on Diamond Hill and Associated Capital 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 Diamond Hill with a short position of Associated Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and Associated Capital.
Diversification Opportunities for Diamond Hill and Associated Capital
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Diamond and Associated is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Investment and Associated Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Capital and Diamond Hill 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 Diamond Hill Investment are associated (or correlated) with Associated Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Capital has no effect on the direction of Diamond Hill i.e., Diamond Hill and Associated Capital go up and down completely randomly.
Pair Corralation between Diamond Hill and Associated Capital
Given the investment horizon of 90 days Diamond Hill is expected to generate 1.79 times less return on investment than Associated Capital. But when comparing it to its historical volatility, Diamond Hill Investment is 1.2 times less risky than Associated Capital. It trades about 0.06 of its potential returns per unit of risk. Associated Capital Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,378 in Associated Capital Group on August 30, 2024 and sell it today you would earn a total of 241.00 from holding Associated Capital Group or generate 7.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Hill Investment vs. Associated Capital Group
Performance |
| Timeline |
| Diamond Hill Investment |
| Associated Capital |
Diamond Hill and Associated Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and Associated Capital
The main advantage of trading using opposite Diamond Hill and Associated Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill position performs unexpectedly, Associated Capital 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 Associated Capital will offset losses from the drop in Associated Capital's long position.| Diamond Hill vs. Federated Premier Municipal | Diamond Hill vs. Blackrock Muniyield | Diamond Hill vs. NXG NextGen Infrastructure | Diamond Hill vs. Federated Investors B |
| Associated Capital vs. TPG Inc | Associated Capital vs. Carlyle Secured Lending | Associated Capital vs. Brookfield 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |