Correlation Between DLH Holdings and Civeo Corp

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

Diversification Opportunities for DLH Holdings and Civeo Corp

0.57

Correlation Coefficient

DLH Holdings  Civeo Corp

Very weak diversification

The 3 months correlation between DLH and Civeo is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding DLH Holdings Corp and Civeo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civeo Corp 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 Civeo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civeo Corp has no effect on the direction of DLH Holdings i.e., DLH Holdings and Civeo Corp go up and down completely randomly.

Pair Corralation between DLH Holdings and Civeo Corp

Given the investment horizon of 90 days DLH Holdings is expected to generate 7.89 times less return on investment than Civeo Corp. In addition to that, DLH Holdings is 1.91 times more volatile than Civeo Corp. It trades about 0.02 of its total potential returns per unit of risk. Civeo Corp is currently generating about 0.35 per unit of volatility. If you would invest  2,218  in Civeo Corp on October 26, 2024 and sell it today you would earn a total of  216.00  from holding Civeo Corp or generate 9.74% return on investment over 90 days.

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

DLH Holdings Corp  vs.  Civeo Corp

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 rather sound technical indicators, DLH Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Civeo Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Civeo Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with DLH Holdings and Civeo Corp

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

The idea behind DLH Holdings Corp and Civeo 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.