Correlation Between Diamond Hill and BTCS
Can any of the company-specific risk be diversified away by investing in both Diamond Hill and BTCS 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 BTCS 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 BTCS Inc, you can compare the effects of market volatilities on Diamond Hill and BTCS 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 BTCS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and BTCS.
Diversification Opportunities for Diamond Hill and BTCS
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Diamond and BTCS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Investment and BTCS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTCS Inc 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 BTCS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTCS Inc has no effect on the direction of Diamond Hill i.e., Diamond Hill and BTCS go up and down completely randomly.
Pair Corralation between Diamond Hill and BTCS
Given the investment horizon of 90 days Diamond Hill is expected to generate 96.47 times less return on investment than BTCS. But when comparing it to its historical volatility, Diamond Hill Investment is 5.33 times less risky than BTCS. It trades about 0.0 of its potential returns per unit of risk. BTCS Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 160.00 in BTCS Inc on September 14, 2024 and sell it today you would earn a total of 202.00 from holding BTCS Inc or generate 126.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Diamond Hill Investment vs. BTCS Inc
Performance |
| Timeline |
| Diamond Hill Investment |
| BTCS Inc |
Diamond Hill and BTCS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and BTCS
The main advantage of trading using opposite Diamond Hill and BTCS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill position performs unexpectedly, BTCS 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 BTCS will offset losses from the drop in BTCS'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 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Transaction History View history of all your transactions and understand their impact on performance |