Correlation Between Diamond Hill and Golden Star
Can any of the company-specific risk be diversified away by investing in both Diamond Hill and Golden Star 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 Golden Star 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 Golden Star Acquisition, you can compare the effects of market volatilities on Diamond Hill and Golden Star 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 Golden Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and Golden Star.
Diversification Opportunities for Diamond Hill and Golden Star
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Diamond and Golden is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Investment and Golden Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Star 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 Golden Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Star Acquisition has no effect on the direction of Diamond Hill i.e., Diamond Hill and Golden Star go up and down completely randomly.
Pair Corralation between Diamond Hill and Golden Star
Given the investment horizon of 90 days Diamond Hill is expected to generate 4.48 times less return on investment than Golden Star. In addition to that, Diamond Hill is 4.92 times more volatile than Golden Star Acquisition. It trades about 0.0 of its total potential returns per unit of risk. Golden Star Acquisition is currently generating about 0.09 per unit of volatility. If you would invest 1,044 in Golden Star Acquisition on September 14, 2024 and sell it today you would earn a total of 78.00 from holding Golden Star Acquisition or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Diamond Hill Investment vs. Golden Star Acquisition
Performance |
| Timeline |
| Diamond Hill Investment |
| Golden Star Acquisition |
Diamond Hill and Golden Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and Golden Star
The main advantage of trading using opposite Diamond Hill and Golden Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill position performs unexpectedly, Golden Star 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 Golden Star will offset losses from the drop in Golden Star'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 |
| Golden Star vs. Visa Class A | Golden Star vs. Diamond Hill Investment | Golden Star vs. Distoken Acquisition | Golden Star vs. AllianceBernstein Holding LP |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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