Correlation Between Contango ORE and DIH Holdings

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

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

Diversification Opportunities for Contango ORE and DIH Holdings

0.16

Correlation Coefficient

Contango ORE  DIH Holdings

Average diversification

The 3 months correlation between Contango and DIH is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Contango ORE and DIH Holdings US, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIH Holdings US, and Contango ORE 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 Contango ORE are associated (or correlated) with DIH Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIH Holdings US, has no effect on the direction of Contango ORE i.e., Contango ORE and DIH Holdings go up and down completely randomly.

Pair Corralation between Contango ORE and DIH Holdings

Given the investment horizon of 90 days Contango ORE is expected to generate 0.26 times more return on investment than DIH Holdings. However, Contango ORE is 3.8 times less risky than DIH Holdings. It trades about 0.02 of its potential returns per unit of risk. DIH Holdings US, is currently generating about -0.09 per unit of risk. If you would invest  1,024  in Contango ORE on December 19, 2024 and sell it today you would earn a total of  14.00  from holding Contango ORE or generate 1.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Contango ORE  vs.  DIH Holdings US,

Contango ORE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Contango ORE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Contango ORE is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

DIH Holdings US,

Risk-Adjusted Performance

Very Weak

Over the last 90 days DIH Holdings US, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Contango ORE and DIH Holdings

The main advantage of trading using opposite Contango ORE and DIH Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contango ORE position performs unexpectedly, DIH 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 DIH Holdings will offset losses from the drop in DIH Holdings' long position.

The idea behind Contango ORE and DIH Holdings US, 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.