Correlation Between Diamond Hill and Marblegate Acquisition
Can any of the company-specific risk be diversified away by investing in both Diamond Hill and Marblegate Acquisition 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 Marblegate Acquisition 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 Marblegate Acquisition Corp, you can compare the effects of market volatilities on Diamond Hill and Marblegate Acquisition 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 Marblegate Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and Marblegate Acquisition.
Diversification Opportunities for Diamond Hill and Marblegate Acquisition
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Diamond and Marblegate is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Investment and Marblegate Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marblegate Acquisition 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 Marblegate Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marblegate Acquisition has no effect on the direction of Diamond Hill i.e., Diamond Hill and Marblegate Acquisition go up and down completely randomly.
Pair Corralation between Diamond Hill and Marblegate Acquisition
Given the investment horizon of 90 days Diamond Hill is expected to generate 229.74 times less return on investment than Marblegate Acquisition. But when comparing it to its historical volatility, Diamond Hill Investment is 14.26 times less risky than Marblegate Acquisition. It trades about 0.01 of its potential returns per unit of risk. Marblegate Acquisition Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Marblegate Acquisition Corp on September 5, 2024 and sell it today you would earn a total of 0.70 from holding Marblegate Acquisition Corp or generate 28.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Diamond Hill Investment vs. Marblegate Acquisition Corp
Performance |
| Timeline |
| Diamond Hill Investment |
| Marblegate Acquisition |
Diamond Hill and Marblegate Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and Marblegate Acquisition
The main advantage of trading using opposite Diamond Hill and Marblegate Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill position performs unexpectedly, Marblegate Acquisition 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 Marblegate Acquisition will offset losses from the drop in Marblegate Acquisition's long position.| Diamond Hill vs. Visa Class A | Diamond Hill vs. Associated Capital Group | Diamond Hill vs. Deutsche Bank AG | Diamond Hill vs. Dynex Capital |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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