Correlation Between Diamond Hill and Cref Inflation
Can any of the company-specific risk be diversified away by investing in both Diamond Hill and Cref Inflation 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 Cref Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Hill Long Short and Cref Inflation Linked Bond, you can compare the effects of market volatilities on Diamond Hill and Cref Inflation 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 Cref Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and Cref Inflation.
Diversification Opportunities for Diamond Hill and Cref Inflation
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Diamond and Cref is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Long Short and Cref Inflation Linked Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Inflation Linked 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 Long Short are associated (or correlated) with Cref Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Inflation Linked has no effect on the direction of Diamond Hill i.e., Diamond Hill and Cref Inflation go up and down completely randomly.
Pair Corralation between Diamond Hill and Cref Inflation
Assuming the 90 days horizon Diamond Hill Long Short is expected to generate 2.35 times more return on investment than Cref Inflation. However, Diamond Hill is 2.35 times more volatile than Cref Inflation Linked Bond. It trades about 0.29 of its potential returns per unit of risk. Cref Inflation Linked Bond is currently generating about 0.07 per unit of risk. If you would invest 2,646 in Diamond Hill Long Short on April 30, 2025 and sell it today you would earn a total of 221.00 from holding Diamond Hill Long Short or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Diamond Hill Long Short vs. Cref Inflation Linked Bond
Performance |
| Timeline |
| Diamond Hill Long |
| Cref Inflation Linked |
Diamond Hill and Cref Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and Cref Inflation
The main advantage of trading using opposite Diamond Hill and Cref Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill position performs unexpectedly, Cref Inflation 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 Cref Inflation will offset losses from the drop in Cref Inflation's long position.| Diamond Hill vs. Bny Mellon Short Term | Diamond Hill vs. Intermediate Government Bond | Diamond Hill vs. Payden Government Fund | Diamond Hill vs. Aig Government Money |
| Cref Inflation vs. Invesco Global Health | Cref Inflation vs. Deutsche Health And | Cref Inflation vs. Schwab Health Care | Cref Inflation vs. Prudential Health Sciences |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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