Correlation Between Diamond Hill and CaliberCos
Can any of the company-specific risk be diversified away by investing in both Diamond Hill and CaliberCos 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 CaliberCos 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 CaliberCos Class A, you can compare the effects of market volatilities on Diamond Hill and CaliberCos 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 CaliberCos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and CaliberCos.
Diversification Opportunities for Diamond Hill and CaliberCos
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Diamond and CaliberCos is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Investment and CaliberCos Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaliberCos Class A 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 CaliberCos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaliberCos Class A has no effect on the direction of Diamond Hill i.e., Diamond Hill and CaliberCos go up and down completely randomly.
Pair Corralation between Diamond Hill and CaliberCos
Given the investment horizon of 90 days Diamond Hill Investment is expected to generate 0.32 times more return on investment than CaliberCos. However, Diamond Hill Investment is 3.17 times less risky than CaliberCos. It trades about 0.0 of its potential returns per unit of risk. CaliberCos Class A is currently generating about -0.06 per unit of risk. If you would invest 16,317 in Diamond Hill Investment on September 12, 2024 and sell it today you would lose (203.00) from holding Diamond Hill Investment or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Hill Investment vs. CaliberCos Class A
Performance |
| Timeline |
| Diamond Hill Investment |
| CaliberCos Class A |
Diamond Hill and CaliberCos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and CaliberCos
The main advantage of trading using opposite Diamond Hill and CaliberCos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill position performs unexpectedly, CaliberCos 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 CaliberCos will offset losses from the drop in CaliberCos' 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 |
| CaliberCos vs. Contagious Gaming | CaliberCos vs. Newpark Resources | CaliberCos vs. Tritent International Agriculture | CaliberCos vs. Tyson Foods |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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