Correlation Between Mader Group and DLH Holdings

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

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

Diversification Opportunities for Mader Group and DLH Holdings

-0.36

Correlation Coefficient

Mader Group  DLH Holdings

Very good diversification

The 3 months correlation between Mader and DLH is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mader Group Limited 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 Mader Group 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 Mader Group Limited 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 Mader Group i.e., Mader Group and DLH Holdings go up and down completely randomly.

Pair Corralation between Mader Group and DLH Holdings

Assuming the 90 days horizon Mader Group Limited is expected to generate 1.09 times more return on investment than DLH Holdings. However, Mader Group is 1.09 times more volatile than DLH Holdings Corp. It trades about 0.05 of its potential returns per unit of risk. DLH Holdings Corp is currently generating about -0.05 per unit of risk. If you would invest  249.00  in Mader Group Limited on November 20, 2024 and sell it today you would earn a total of  151.00  from holding Mader Group Limited or generate 60.64% return on investment over 90 days.

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

Mader Group Limited  vs.  DLH Holdings Corp

Mader Group Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mader Group Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Mader Group reported solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with Mader Group and DLH Holdings

The main advantage of trading using opposite Mader Group and DLH Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mader Group 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 Mader Group Limited 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 CEOs Directory module to screen CEOs from public companies around the world.