Correlation Between Aramark Holdings and DLH Holdings

Can any of the company-specific risk be diversified away by investing in both Aramark Holdings 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 Aramark Holdings and DLH Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aramark Holdings and DLH Holdings Corp, you can compare the effects of market volatilities on Aramark Holdings 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 Aramark Holdings with a short position of DLH Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aramark Holdings and DLH Holdings.

Diversification Opportunities for Aramark Holdings and DLH Holdings

-0.32

Correlation Coefficient

Aramark Holdings  DLH Holdings

Very good diversification

The 3 months correlation between Aramark and DLH is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aramark Holdings 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 Aramark 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 Aramark Holdings 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 Aramark Holdings i.e., Aramark Holdings and DLH Holdings go up and down completely randomly.

Pair Corralation between Aramark Holdings and DLH Holdings

Given the investment horizon of 90 days Aramark Holdings is expected to generate 0.66 times more return on investment than DLH Holdings. However, Aramark Holdings is 1.51 times less risky than DLH Holdings. It trades about 0.05 of its potential returns per unit of risk. DLH Holdings Corp is currently generating about -0.11 per unit of risk. If you would invest  3,255  in Aramark Holdings on March 13, 2024 and sell it today you would earn a total of  122.00  from holding Aramark Holdings or generate 3.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Aramark Holdings  vs.  DLH Holdings Corp

Aramark Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aramark Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent primary indicators, Aramark Holdings is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

DLH Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DLH Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Aramark Holdings and DLH Holdings

The main advantage of trading using opposite Aramark Holdings and DLH Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aramark Holdings 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.

The idea behind Aramark Holdings and DLH Holdings Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.