Correlation Between Diamond Hill and Huize Holding
Can any of the company-specific risk be diversified away by investing in both Diamond Hill and Huize Holding 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 Huize Holding 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 Huize Holding, you can compare the effects of market volatilities on Diamond Hill and Huize Holding 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 Huize Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and Huize Holding.
Diversification Opportunities for Diamond Hill and Huize Holding
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Diamond and Huize is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Investment and Huize Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huize Holding 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 Huize Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huize Holding has no effect on the direction of Diamond Hill i.e., Diamond Hill and Huize Holding go up and down completely randomly.
Pair Corralation between Diamond Hill and Huize Holding
Given the investment horizon of 90 days Diamond Hill Investment is expected to under-perform the Huize Holding. But the stock apears to be less risky and, when comparing its historical volatility, Diamond Hill Investment is 29.69 times less risky than Huize Holding. The stock trades about -0.01 of its potential returns per unit of risk. The Huize Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 120.00 in Huize Holding on November 9, 2024 and sell it today you would earn a total of 201.00 from holding Huize Holding or generate 167.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Hill Investment vs. Huize Holding
Performance |
| Timeline |
| Diamond Hill Investment |
| Huize Holding |
Diamond Hill and Huize Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and Huize Holding
The main advantage of trading using opposite Diamond Hill and Huize Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill position performs unexpectedly, Huize Holding 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 Huize Holding will offset losses from the drop in Huize Holding'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 |
| Huize Holding vs. CorVel Corp | Huize Holding vs. Erie Indemnity | Huize Holding vs. Crawford Company | Huize Holding vs. eHealth |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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