Correlation Between Barrett Business and DLH Holdings
Can any of the company-specific risk be diversified away by investing in both Barrett Business 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 Barrett Business and DLH Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barrett Business Services and DLH Holdings Corp, you can compare the effects of market volatilities on Barrett Business 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 Barrett Business with a short position of DLH Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrett Business and DLH Holdings.
Diversification Opportunities for Barrett Business and DLH Holdings
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barrett and DLH is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Barrett Business Services 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 Barrett Business 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 Barrett Business Services 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 Barrett Business i.e., Barrett Business and DLH Holdings go up and down completely randomly.
Pair Corralation between Barrett Business and DLH Holdings
Given the investment horizon of 90 days Barrett Business Services is expected to generate 0.57 times more return on investment than DLH Holdings. However, Barrett Business Services is 1.74 times less risky than DLH Holdings. It trades about 0.08 of its potential returns per unit of risk. DLH Holdings Corp is currently generating about 0.0 per unit of risk. If you would invest 8,192 in Barrett Business Services on January 19, 2024 and sell it today you would earn a total of 3,995 from holding Barrett Business Services or generate 48.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrett Business Services vs. DLH Holdings Corp
Performance |
| Timeline |
| Barrett Business Services |
| DLH Holdings Corp |
Barrett Business and DLH Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrett Business and DLH Holdings
The main advantage of trading using opposite Barrett Business and DLH Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrett Business 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.| Barrett Business vs. Korn Ferry | Barrett Business vs. Kelly Services A | Barrett Business vs. Kforce Inc | Barrett Business vs. Hudson Global |
| DLH Holdings vs. Aramark Holdings | DLH Holdings vs. Civeo Corp | DLH Holdings vs. ADM Endeavors | DLH Holdings vs. Maximus |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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