Correlation Between DLH Holdings and AMREP
Can any of the company-specific risk be diversified away by investing in both DLH Holdings and AMREP 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 AMREP 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 AMREP, you can compare the effects of market volatilities on DLH Holdings and AMREP 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 AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of DLH Holdings and AMREP.
Diversification Opportunities for DLH Holdings and AMREP
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DLH and AMREP is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding DLH Holdings Corp and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP 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 AMREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMREP has no effect on the direction of DLH Holdings i.e., DLH Holdings and AMREP go up and down completely randomly.
Pair Corralation between DLH Holdings and AMREP
Given the investment horizon of 90 days DLH Holdings is expected to generate 2.92 times less return on investment than AMREP. But when comparing it to its historical volatility, DLH Holdings Corp is 1.37 times less risky than AMREP. It trades about 0.09 of its potential returns per unit of risk. AMREP is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,990 in AMREP on August 31, 2024 and sell it today you would earn a total of 550.00 from holding AMREP or generate 18.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DLH Holdings Corp vs. AMREP
Performance |
| Timeline |
| DLH Holdings Corp |
| AMREP |
DLH Holdings and AMREP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DLH Holdings and AMREP
The main advantage of trading using opposite DLH Holdings and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DLH Holdings position performs unexpectedly, AMREP 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 AMREP will offset losses from the drop in AMREP's long position.| DLH Holdings vs. Network 1 Technologies | DLH Holdings vs. Wilhelmina | DLH Holdings vs. Mader Group Limited | DLH Holdings vs. First Advantage Corp |
| AMREP vs. Landsea Homes Corp | AMREP vs. Forestar Group | AMREP vs. Five Point Holdings | AMREP vs. American Realty Investors |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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