Correlation Between DLH Holdings and GEE
Can any of the company-specific risk be diversified away by investing in both DLH Holdings and GEE 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 DLH Holdings and GEE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DLH Holdings Corp and GEE Group, you can compare the effects of market volatilities on DLH Holdings and GEE 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 DLH Holdings with a short position of GEE. Check out your portfolio center. Please also check ongoing floating volatility patterns of DLH Holdings and GEE.
Diversification Opportunities for DLH Holdings and GEE
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DLH and GEE is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding DLH Holdings Corp and GEE Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEE Group and DLH 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 DLH Holdings Corp are associated (or correlated) with GEE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEE Group has no effect on the direction of DLH Holdings i.e., DLH Holdings and GEE go up and down completely randomly.
Pair Corralation between DLH Holdings and GEE
Given the investment horizon of 90 days DLH Holdings Corp is expected to generate 0.78 times more return on investment than GEE. However, DLH Holdings Corp is 1.28 times less risky than GEE. It trades about -0.25 of its potential returns per unit of risk. GEE Group is currently generating about -0.21 per unit of risk. If you would invest 1,583 in DLH Holdings Corp on January 25, 2024 and sell it today you would lose (496.00) from holding DLH Holdings Corp or give up 31.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DLH Holdings Corp vs. GEE Group
Performance |
| Timeline |
| DLH Holdings Corp |
| GEE Group |
DLH Holdings and GEE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DLH Holdings and GEE
The main advantage of trading using opposite DLH Holdings and GEE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DLH Holdings position performs unexpectedly, GEE 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 GEE will offset losses from the drop in GEE's long position.| DLH Holdings vs. Discount Print USA | DLH Holdings vs. Cass Information Systems | DLH Holdings vs. Civeo Corp | DLH Holdings vs. Network 1 Technologies |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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