Correlation Between SMX Public and DLH Holdings
Can any of the company-specific risk be diversified away by investing in both SMX Public and DLH Holdings 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 SMX Public and DLH Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMX Public Limited and DLH Holdings Corp, you can compare the effects of market volatilities on SMX Public and DLH Holdings 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 SMX Public with a short position of DLH Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMX Public and DLH Holdings.
Diversification Opportunities for SMX Public and DLH Holdings
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between SMX and DLH is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding SMX Public Limited and DLH Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DLH Holdings Corp and SMX Public 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 SMX Public Limited are associated (or correlated) with DLH Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DLH Holdings Corp has no effect on the direction of SMX Public i.e., SMX Public and DLH Holdings go up and down completely randomly.
Pair Corralation between SMX Public and DLH Holdings
Considering the 90-day investment horizon SMX Public Limited is expected to under-perform the DLH Holdings. In addition to that, SMX Public is 6.03 times more volatile than DLH Holdings Corp. It trades about -0.35 of its total potential returns per unit of risk. DLH Holdings Corp is currently generating about -0.06 per unit of volatility. If you would invest 779.00 in DLH Holdings Corp on November 3, 2024 and sell it today you would lose (29.00) from holding DLH Holdings Corp or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMX Public Limited vs. DLH Holdings Corp
Performance |
| Timeline |
| SMX Public Limited |
| DLH Holdings Corp |
SMX Public and DLH Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMX Public and DLH Holdings
The main advantage of trading using opposite SMX Public and DLH Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMX Public position performs unexpectedly, DLH Holdings 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 DLH Holdings will offset losses from the drop in DLH Holdings' long position.| SMX Public vs. Team Inc | SMX Public vs. Lichen China Limited | SMX Public vs. System1 | SMX Public vs. Eastman Kodak Co |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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