Correlation Between Diamond Hill and International General
Can any of the company-specific risk be diversified away by investing in both Diamond Hill and International General 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 International General 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 International General Insurance, you can compare the effects of market volatilities on Diamond Hill and International General 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 International General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and International General.
Diversification Opportunities for Diamond Hill and International General
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Diamond and International is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Investment and International General Insuranc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International General 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 International General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International General has no effect on the direction of Diamond Hill i.e., Diamond Hill and International General go up and down completely randomly.
Pair Corralation between Diamond Hill and International General
Given the investment horizon of 90 days Diamond Hill is expected to generate 14.9 times less return on investment than International General. But when comparing it to its historical volatility, Diamond Hill Investment is 1.24 times less risky than International General. It trades about 0.01 of its potential returns per unit of risk. International General Insurance is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 742.00 in International General Insurance on August 27, 2024 and sell it today you would earn a total of 1,856 from holding International General Insurance or generate 250.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Hill Investment vs. International General Insuranc
Performance |
| Timeline |
| Diamond Hill Investment |
| International General |
Diamond Hill and International General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and International General
The main advantage of trading using opposite Diamond Hill and International General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill position performs unexpectedly, International General 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 International General will offset losses from the drop in International General'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 |
| International General vs. Enstar Group Limited | International General vs. Axa Equitable Holdings | International General vs. Arch Capital Group | International General vs. Waterdrop ADR |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |