Correlation Between DLH Holdings and Team
Can any of the company-specific risk be diversified away by investing in both DLH Holdings and Team 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 Team 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 Team Inc, you can compare the effects of market volatilities on DLH Holdings and Team 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 Team. Check out your portfolio center. Please also check ongoing floating volatility patterns of DLH Holdings and Team.
Diversification Opportunities for DLH Holdings and Team
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DLH and Team is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding DLH Holdings Corp and Team Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Team Inc 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 Team. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Team Inc has no effect on the direction of DLH Holdings i.e., DLH Holdings and Team go up and down completely randomly.
Pair Corralation between DLH Holdings and Team
Given the investment horizon of 90 days DLH Holdings is expected to generate 2.28 times less return on investment than Team. But when comparing it to its historical volatility, DLH Holdings Corp is 1.7 times less risky than Team. It trades about 0.07 of its potential returns per unit of risk. Team Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,498 in Team Inc on October 24, 2024 and sell it today you would earn a total of 102.00 from holding Team Inc or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DLH Holdings Corp vs. Team Inc
Performance |
| Timeline |
| DLH Holdings Corp |
| Team Inc |
DLH Holdings and Team Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DLH Holdings and Team
The main advantage of trading using opposite DLH Holdings and Team positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DLH Holdings position performs unexpectedly, Team 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 Team will offset losses from the drop in Team'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 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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