Correlation Between Diamond Hill and Davis Select
Can any of the company-specific risk be diversified away by investing in both Diamond Hill and Davis Select 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 Diamond Hill and Davis Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Hill Funds and Davis Select International, you can compare the effects of market volatilities on Diamond Hill and Davis Select 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 Diamond Hill with a short position of Davis Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and Davis Select.
Diversification Opportunities for Diamond Hill and Davis Select
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Diamond and Davis is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Funds and Davis Select International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Davis Select Interna and Diamond Hill 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 Diamond Hill Funds are associated (or correlated) with Davis Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Davis Select Interna has no effect on the direction of Diamond Hill i.e., Diamond Hill and Davis Select go up and down completely randomly.
Pair Corralation between Diamond Hill and Davis Select
Given the investment horizon of 90 days Diamond Hill Funds is expected to under-perform the Davis Select. But the etf apears to be less risky and, when comparing its historical volatility, Diamond Hill Funds is 1.28 times less risky than Davis Select. The etf trades about -0.05 of its potential returns per unit of risk. The Davis Select International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,651 in Davis Select International on August 28, 2025 and sell it today you would earn a total of 99.00 from holding Davis Select International or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 66.67% |
| Values | Daily Returns |
Diamond Hill Funds vs. Davis Select International
Performance |
| Timeline |
| Diamond Hill Funds |
| Davis Select Interna |
Diamond Hill and Davis Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and Davis Select
The main advantage of trading using opposite Diamond Hill and Davis Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill position performs unexpectedly, Davis Select 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 Davis Select will offset losses from the drop in Davis Select's long position.| Diamond Hill vs. FT Vest Equity | Diamond Hill vs. Northern Lights | Diamond Hill vs. Dimensional International High | Diamond Hill vs. JPMorgan Fundamental Data |
| Davis Select vs. FT Vest Equity | Davis Select vs. Northern Lights | Davis Select vs. Diamond Hill Funds | Davis Select vs. Dimensional International High |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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