Correlation Between DLH Holdings and Aeries Technology
Can any of the company-specific risk be diversified away by investing in both DLH Holdings and Aeries Technology 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 DLH Holdings and Aeries Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DLH Holdings Corp and Aeries Technology, you can compare the effects of market volatilities on DLH Holdings and Aeries Technology 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 DLH Holdings with a short position of Aeries Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of DLH Holdings and Aeries Technology.
Diversification Opportunities for DLH Holdings and Aeries Technology
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DLH and Aeries is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding DLH Holdings Corp and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology and DLH Holdings 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 DLH Holdings Corp are associated (or correlated) with Aeries Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeries Technology has no effect on the direction of DLH Holdings i.e., DLH Holdings and Aeries Technology go up and down completely randomly.
Pair Corralation between DLH Holdings and Aeries Technology
Given the investment horizon of 90 days DLH Holdings Corp is expected to under-perform the Aeries Technology. But the stock apears to be less risky and, when comparing its historical volatility, DLH Holdings Corp is 9.75 times less risky than Aeries Technology. The stock trades about -0.07 of its potential returns per unit of risk. The Aeries Technology is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2.60 in Aeries Technology on September 1, 2024 and sell it today you would earn a total of 0.91 from holding Aeries Technology or generate 35.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 34.13% |
| Values | Daily Returns |
DLH Holdings Corp vs. Aeries Technology
Performance |
| Timeline |
| DLH Holdings Corp |
| Aeries Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
DLH Holdings and Aeries Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DLH Holdings and Aeries Technology
The main advantage of trading using opposite DLH Holdings and Aeries Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DLH Holdings position performs unexpectedly, Aeries Technology 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 Aeries Technology will offset losses from the drop in Aeries Technology's long position.| DLH Holdings vs. Discount Print USA | DLH Holdings vs. Cass Information Systems | DLH Holdings vs. Civeo Corp | DLH Holdings vs. Network 1 Technologies |
| Aeries Technology vs. CRA International | Aeries Technology vs. Huron Consulting Group | Aeries Technology vs. Franklin Covey | Aeries Technology vs. ICF International |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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