Correlation Between Diamond Hill and SK Growth
Can any of the company-specific risk be diversified away by investing in both Diamond Hill and SK Growth 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 Diamond Hill and SK Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Hill Investment and SK Growth Opportunities, you can compare the effects of market volatilities on Diamond Hill and SK Growth 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 Diamond Hill with a short position of SK Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and SK Growth.
Diversification Opportunities for Diamond Hill and SK Growth
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Diamond and SKGR is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Investment and SK Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Growth Opportunities and Diamond Hill 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 Diamond Hill Investment are associated (or correlated) with SK Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Growth Opportunities has no effect on the direction of Diamond Hill i.e., Diamond Hill and SK Growth go up and down completely randomly.
Pair Corralation between Diamond Hill and SK Growth
Given the investment horizon of 90 days Diamond Hill is expected to generate 17.62 times less return on investment than SK Growth. In addition to that, Diamond Hill is 4.71 times more volatile than SK Growth Opportunities. It trades about 0.0 of its total potential returns per unit of risk. SK Growth Opportunities is currently generating about 0.07 per unit of volatility. If you would invest 1,043 in SK Growth Opportunities on December 5, 2024 and sell it today you would earn a total of 122.00 from holding SK Growth Opportunities or generate 11.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Diamond Hill Investment vs. SK Growth Opportunities
Performance |
Timeline |
Diamond Hill Investment |
SK Growth Opportunities |
Diamond Hill and SK Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Diamond Hill and SK Growth
The main advantage of trading using opposite Diamond Hill and SK Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill position performs unexpectedly, SK Growth 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 SK Growth will offset losses from the drop in SK Growth's long position.Diamond Hill vs. Federated Premier Municipal | Diamond Hill vs. Blackrock Muniyield | Diamond Hill vs. NXG NextGen Infrastructure | Diamond Hill vs. Federated Investors B |
SK Growth vs. Four Leaf Acquisition | SK Growth vs. WinVest Acquisition Corp | SK Growth vs. Alpha One | SK Growth vs. Manaris Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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