Correlation Between Diamond Hill and Pacer Lunt
Can any of the company-specific risk be diversified away by investing in both Diamond Hill and Pacer Lunt 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 Pacer Lunt 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 Pacer Lunt Large, you can compare the effects of market volatilities on Diamond Hill and Pacer Lunt 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 Pacer Lunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and Pacer Lunt.
Diversification Opportunities for Diamond Hill and Pacer Lunt
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Diamond and Pacer is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Funds and Pacer Lunt Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Lunt Large 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 Pacer Lunt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Lunt Large has no effect on the direction of Diamond Hill i.e., Diamond Hill and Pacer Lunt go up and down completely randomly.
Pair Corralation between Diamond Hill and Pacer Lunt
Given the investment horizon of 90 days Diamond Hill Funds is expected to under-perform the Pacer Lunt. In addition to that, Diamond Hill is 1.05 times more volatile than Pacer Lunt Large. It trades about -0.03 of its total potential returns per unit of risk. Pacer Lunt Large is currently generating about 0.05 per unit of volatility. If you would invest 5,032 in Pacer Lunt Large on September 3, 2025 and sell it today you would earn a total of 98.00 from holding Pacer Lunt Large or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 70.31% |
| Values | Daily Returns |
Diamond Hill Funds vs. Pacer Lunt Large
Performance |
| Timeline |
| Diamond Hill Funds |
| Pacer Lunt Large |
Diamond Hill and Pacer Lunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and Pacer Lunt
The main advantage of trading using opposite Diamond Hill and Pacer Lunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill position performs unexpectedly, Pacer Lunt 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 Pacer Lunt will offset losses from the drop in Pacer Lunt'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 |
| Pacer Lunt vs. FT Vest Equity | Pacer Lunt vs. Northern Lights | Pacer Lunt vs. Diamond Hill Funds | Pacer Lunt 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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