Correlation Between DLH Holdings and AMREP

Can any of the company-specific risk be diversified away by investing in both DLH Holdings and AMREP 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 AMREP 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 AMREP, you can compare the effects of market volatilities on DLH Holdings and AMREP 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 AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of DLH Holdings and AMREP.

Diversification Opportunities for DLH Holdings and AMREP

0.9

Correlation Coefficient

DLH Holdings  AMREP

Almost no diversification

The 3 months correlation between DLH and AMREP is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding DLH Holdings Corp and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP 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 AMREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMREP has no effect on the direction of DLH Holdings i.e., DLH Holdings and AMREP go up and down completely randomly.

Pair Corralation between DLH Holdings and AMREP

Given the investment horizon of 90 days DLH Holdings Corp is expected to under-perform the AMREP. But the stock apears to be less risky and, when comparing its historical volatility, DLH Holdings Corp is 1.16 times less risky than AMREP. The stock trades about -0.27 of its potential returns per unit of risk. The AMREP is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest  3,054  in AMREP on December 27, 2024 and sell it today you would lose (1,070) from holding AMREP or give up 35.04% of portfolio value over 90 days.

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

DLH Holdings Corp  vs.  AMREP

DLH Holdings Corp

Risk-Adjusted Performance

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

AMREP

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMREP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with DLH Holdings and AMREP

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

The idea behind DLH Holdings Corp and AMREP 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.