Correlation Between Oak Woods and Diamond Hill
Can any of the company-specific risk be diversified away by investing in both Oak Woods and Diamond Hill 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 Oak Woods and Diamond Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oak Woods Acquisition and Diamond Hill Investment, you can compare the effects of market volatilities on Oak Woods and Diamond Hill 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 Oak Woods with a short position of Diamond Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oak Woods and Diamond Hill.
Diversification Opportunities for Oak Woods and Diamond Hill
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oak and Diamond is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Oak Woods Acquisition and Diamond Hill Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Hill Investment and Oak Woods 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 Oak Woods Acquisition are associated (or correlated) with Diamond Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Hill Investment has no effect on the direction of Oak Woods i.e., Oak Woods and Diamond Hill go up and down completely randomly.
Pair Corralation between Oak Woods and Diamond Hill
Assuming the 90 days horizon Oak Woods Acquisition is expected to generate 7.36 times more return on investment than Diamond Hill. However, Oak Woods is 7.36 times more volatile than Diamond Hill Investment. It trades about 0.06 of its potential returns per unit of risk. Diamond Hill Investment is currently generating about 0.06 per unit of risk. If you would invest 17.00 in Oak Woods Acquisition on September 3, 2024 and sell it today you would earn a total of 2.00 from holding Oak Woods Acquisition or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oak Woods Acquisition vs. Diamond Hill Investment
Performance |
| Timeline |
| Oak Woods Acquisition |
| Diamond Hill Investment |
Oak Woods and Diamond Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oak Woods and Diamond Hill
The main advantage of trading using opposite Oak Woods and Diamond Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Woods position performs unexpectedly, Diamond Hill 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 Diamond Hill will offset losses from the drop in Diamond Hill's long position.| Oak Woods vs. Highway Holdings Limited | Oak Woods vs. Siriuspoint | Oak Woods vs. Avient Corp | Oak Woods vs. AmTrust Financial Services |
| Diamond Hill vs. Federated Premier Municipal | Diamond Hill vs. Blackrock Muniyield | Diamond Hill vs. Federated Investors B | Diamond Hill vs. SEI Investments |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |