Correlation Between Diamond Hill and Binah Capital
Can any of the company-specific risk be diversified away by investing in both Diamond Hill and Binah 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 Binah 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 Binah Capital Group,, you can compare the effects of market volatilities on Diamond Hill and Binah 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 Binah Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and Binah Capital.
Diversification Opportunities for Diamond Hill and Binah Capital
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Diamond and Binah is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Investment and Binah Capital Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binah Capital Group, 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 Binah Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binah Capital Group, has no effect on the direction of Diamond Hill i.e., Diamond Hill and Binah Capital go up and down completely randomly.
Pair Corralation between Diamond Hill and Binah Capital
Given the investment horizon of 90 days Diamond Hill Investment is expected to under-perform the Binah Capital. But the stock apears to be less risky and, when comparing its historical volatility, Diamond Hill Investment is 9.09 times less risky than Binah Capital. The stock trades about -0.27 of its potential returns per unit of risk. The Binah Capital Group, is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 330.00 in Binah Capital Group, on September 12, 2024 and sell it today you would lose (39.00) from holding Binah Capital Group, or give up 11.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Hill Investment vs. Binah Capital Group,
Performance |
| Timeline |
| Diamond Hill Investment |
| Binah Capital Group, |
Diamond Hill and Binah Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and Binah Capital
The main advantage of trading using opposite Diamond Hill and Binah Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill position performs unexpectedly, Binah 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 Binah Capital will offset losses from the drop in Binah Capital's long position.| Diamond Hill vs. Stellus Capital Investment | Diamond Hill vs. Prospect Capital | Diamond Hill vs. Gladstone Capital | Diamond Hill vs. Main Street Capital |
| Binah Capital vs. Primo Brands | Binah Capital vs. Alvarium Tiedemann Holdings | Binah Capital vs. Diamond Estates Wines | Binah Capital vs. Western Acquisition Ventures |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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