Correlation Between DLH Holdings and Barrett Business
Can any of the company-specific risk be diversified away by investing in both DLH Holdings and Barrett Business 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 Barrett Business 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 Barrett Business Services, you can compare the effects of market volatilities on DLH Holdings and Barrett Business 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 Barrett Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of DLH Holdings and Barrett Business.
Diversification Opportunities for DLH Holdings and Barrett Business
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DLH and Barrett is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding DLH Holdings Corp and Barrett Business Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrett Business Services 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 Barrett Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrett Business Services has no effect on the direction of DLH Holdings i.e., DLH Holdings and Barrett Business go up and down completely randomly.
Pair Corralation between DLH Holdings and Barrett Business
Given the investment horizon of 90 days DLH Holdings Corp is expected to under-perform the Barrett Business. In addition to that, DLH Holdings is 1.96 times more volatile than Barrett Business Services. It trades about -0.57 of its total potential returns per unit of risk. Barrett Business Services is currently generating about -0.09 per unit of volatility. If you would invest 12,541 in Barrett Business Services on January 24, 2024 and sell it today you would lose (260.00) from holding Barrett Business Services or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DLH Holdings Corp vs. Barrett Business Services
Performance |
| Timeline |
| DLH Holdings Corp |
| Barrett Business Services |
DLH Holdings and Barrett Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DLH Holdings and Barrett Business
The main advantage of trading using opposite DLH Holdings and Barrett Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DLH Holdings position performs unexpectedly, Barrett Business 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 Barrett Business will offset losses from the drop in Barrett Business' long position.| DLH Holdings vs. Discount Print USA | DLH Holdings vs. Cass Information Systems | DLH Holdings vs. Maximus | DLH Holdings vs. AZZ Incorporated |
| Barrett Business vs. Discount Print USA | Barrett Business vs. Cass Information Systems | Barrett Business vs. Maximus | Barrett Business vs. AZZ Incorporated |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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