Correlation Between DSS and DLH Holdings

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Can any of the company-specific risk be diversified away by investing in both DSS 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 DSS and DLH Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSS Inc and DLH Holdings Corp, you can compare the effects of market volatilities on DSS 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 DSS with a short position of DLH Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSS and DLH Holdings.

Diversification Opportunities for DSS and DLH Holdings

-0.06
  Correlation Coefficient

Good diversification

The 3 months correlation between DSS and DLH is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding DSS Inc 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 DSS 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 DSS Inc 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 DSS i.e., DSS and DLH Holdings go up and down completely randomly.

Pair Corralation between DSS and DLH Holdings

Considering the 90-day investment horizon DSS Inc is expected to generate 1.23 times more return on investment than DLH Holdings. However, DSS is 1.23 times more volatile than DLH Holdings Corp. It trades about -0.05 of its potential returns per unit of risk. DLH Holdings Corp is currently generating about -0.22 per unit of risk. If you would invest  189.00  in DSS Inc on December 29, 2023 and sell it today you would lose (8.00) from holding DSS Inc or give up 4.23% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

DSS Inc  vs.  DLH Holdings Corp

 Performance 
       Timeline  
DSS Inc 

Risk-Adjusted Performance

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Over the last 90 days DSS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
DLH Holdings Corp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 weak performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in April 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

DSS and DLH Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DSS and DLH Holdings

The main advantage of trading using opposite DSS and DLH Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSS 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 DSS Inc 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.
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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