Correlation Between RadNet and DHI
Can any of the company-specific risk be diversified away by investing in both RadNet and DHI 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 RadNet and DHI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RadNet Inc and DHI Group, you can compare the effects of market volatilities on RadNet and DHI 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 RadNet with a short position of DHI. Check out your portfolio center. Please also check ongoing floating volatility patterns of RadNet and DHI.
Diversification Opportunities for RadNet and DHI
Excellent diversification
The 3 months correlation between RadNet and DHI is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and DHI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHI Group and RadNet 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 RadNet Inc are associated (or correlated) with DHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHI Group has no effect on the direction of RadNet i.e., RadNet and DHI go up and down completely randomly.
Pair Corralation between RadNet and DHI
Given the investment horizon of 90 days RadNet Inc is expected to under-perform the DHI. But the stock apears to be less risky and, when comparing its historical volatility, RadNet Inc is 1.76 times less risky than DHI. The stock trades about -0.14 of its potential returns per unit of risk. The DHI Group is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 180.00 in DHI Group on November 6, 2024 and sell it today you would earn a total of 93.00 from holding DHI Group or generate 51.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RadNet Inc vs. DHI Group
Performance |
| Timeline |
| RadNet Inc |
| DHI Group |
RadNet and DHI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RadNet and DHI
The main advantage of trading using opposite RadNet and DHI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RadNet position performs unexpectedly, DHI 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 DHI will offset losses from the drop in DHI's long position.| RadNet vs. Sotera Health Co | RadNet vs. Neogen | RadNet vs. Myriad Genetics | RadNet vs. bioAffinity Technologies Warrant |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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