This module allows you to analyze existing cross correlation between DOW and Diamond Hill Investment Group. You can compare the effects of market volatilities on DOW 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 DOW with a short position of Diamond Hill. See also your portfolio center. Please also check ongoing floating volatility patterns of DOW and Diamond Hill.
Given the investment horizon of 30 days, DOW is expected to generate 0.54 times more return on investment than Diamond Hill. However, DOW is 1.85 times less risky than Diamond Hill. It trades about 0.12 of its potential returns per unit of risk. Diamond Hill Investment Group is currently generating about -0.12 per unit of risk. If you would invest 2,470,021 in DOW on June 19, 2018 and sell it today you would earn a total of 49,908 from holding DOW or generate 2.02% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding DOW and Diamond Hill Investment Group in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Diamond Hill Investment and DOW 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 DOW 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 DOW i.e. DOW and Diamond Hill go up and down completely randomly.
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