Correlation Between DLH Holdings and CRA International
Can any of the company-specific risk be diversified away by investing in both DLH Holdings and CRA International 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 CRA International 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 CRA International, you can compare the effects of market volatilities on DLH Holdings and CRA International 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 CRA International. Check out your portfolio center. Please also check ongoing floating volatility patterns of DLH Holdings and CRA International.
Diversification Opportunities for DLH Holdings and CRA International
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DLH and CRA is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding DLH Holdings Corp and CRA International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRA International 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 CRA International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRA International has no effect on the direction of DLH Holdings i.e., DLH Holdings and CRA International go up and down completely randomly.
Pair Corralation between DLH Holdings and CRA International
Given the investment horizon of 90 days DLH Holdings Corp is expected to under-perform the CRA International. In addition to that, DLH Holdings is 1.24 times more volatile than CRA International. It trades about -0.06 of its total potential returns per unit of risk. CRA International is currently generating about 0.15 per unit of volatility. If you would invest 9,263 in CRA International on August 24, 2024 and sell it today you would earn a total of 9,675 from holding CRA International or generate 104.45% 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. CRA International
Performance |
| Timeline |
| DLH Holdings Corp |
| CRA International |
DLH Holdings and CRA International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DLH Holdings and CRA International
The main advantage of trading using opposite DLH Holdings and CRA International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DLH Holdings position performs unexpectedly, CRA International 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 CRA International will offset losses from the drop in CRA International's long position.| DLH Holdings vs. First Advantage Corp | DLH Holdings vs. Discount Print USA | DLH Holdings vs. Cass Information Systems | DLH Holdings vs. Civeo Corp |
| CRA International vs. Franklin Covey | CRA International vs. ICF International | CRA International vs. Huron Consulting Group | CRA International vs. FTI Consulting |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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