Correlation Between DLH Holdings and Waste Management
Can any of the company-specific risk be diversified away by investing in both DLH Holdings and Waste Management 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 Waste Management 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 Waste Management, you can compare the effects of market volatilities on DLH Holdings and Waste Management 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 Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of DLH Holdings and Waste Management.
Diversification Opportunities for DLH Holdings and Waste Management
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DLH and Waste is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding DLH Holdings Corp and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management 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 Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of DLH Holdings i.e., DLH Holdings and Waste Management go up and down completely randomly.
Pair Corralation between DLH Holdings and Waste Management
Given the investment horizon of 90 days DLH Holdings Corp is expected to under-perform the Waste Management. In addition to that, DLH Holdings is 3.54 times more volatile than Waste Management. It trades about -0.27 of its total potential returns per unit of risk. Waste Management is currently generating about 0.11 per unit of volatility. If you would invest 20,107 in Waste Management on February 20, 2024 and sell it today you would earn a total of 937.00 from holding Waste Management or generate 4.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
DLH Holdings Corp vs. Waste Management
Performance |
Timeline |
DLH Holdings Corp |
Waste Management |
DLH Holdings and Waste Management Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DLH Holdings and Waste Management
The main advantage of trading using opposite DLH Holdings and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DLH Holdings position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management'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 |
Waste Management vs. Waste Connections | Waste Management vs. Clean Harbors | Waste Management vs. Casella Waste Systems | Waste Management vs. Gfl Environmental Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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