Correlation Between CBIZ and DLH Holdings

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

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

Diversification Opportunities for CBIZ and DLH Holdings

-0.41

Correlation Coefficient

CBIZ  DLH Holdings

Very good diversification

The 3 months correlation between CBIZ and DLH is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CBIZ 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 CBIZ 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 CBIZ 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 CBIZ i.e., CBIZ and DLH Holdings go up and down completely randomly.

Pair Corralation between CBIZ and DLH Holdings

Considering the 90-day investment horizon CBIZ Inc is expected to generate 0.68 times more return on investment than DLH Holdings. However, CBIZ Inc is 1.47 times less risky than DLH Holdings. It trades about 0.07 of its potential returns per unit of risk. DLH Holdings Corp is currently generating about -0.02 per unit of risk. If you would invest  4,659  in CBIZ Inc on September 18, 2024 and sell it today you would earn a total of  3,406  from holding CBIZ Inc or generate 73.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CBIZ Inc  vs.  DLH Holdings Corp

CBIZ Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CBIZ Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, CBIZ showed solid returns over the last few months and may actually be approaching a breakup point.

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 weak performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with CBIZ and DLH Holdings

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

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.