Diamond Stock Volatility

DHIL
 Stock
  

USD 177.30  0.66  0.37%   

Diamond Hill Inv secures Sharpe Ratio (or Efficiency) of -0.0115, which denotes the company had -0.0115% of return per unit of standard deviation over the last 3 months. Macroaxis philosophy in predicting the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. Diamond Hill Inv exposes twenty-eight different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to confirm Diamond Hill Inv mean deviation of 1.53 to check the risk estimate we provide.
  
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Diamond Hill Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Diamond daily returns, and it is calculated using variance and standard deviation. We also use Diamond's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Diamond Hill volatility.

90 Days Market Risk

Very steady

Chance of Distress

Close to Average

90 Days Economic Sensitivity

Almost mirrors the market
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Diamond Hill can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of Diamond Hill at lower prices. For example, an investor can purchase Diamond stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of Diamond Hill's stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.

Moving together with Diamond Hill

0.78ABAlliancebernsteinPairCorr
0.76AINCAshfordPairCorr
0.8AMGAffiliated ManagersPairCorr
0.84AMKAssetmark FinancialPairCorr
0.73AMPAmeriprise FinancialPairCorr

Diamond Hill Market Sensitivity And Downside Risk

Diamond Hill's beta coefficient measures the volatility of Diamond stock compared to the systematic risk of the entire stock market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Diamond stock's returns against your selected market. In other words, Diamond Hill's beta of 0.95 provides an investor with an approximation of how much risk Diamond Hill stock can potentially add to one of your existing portfolios.
Let's try to break down what Diamond's beta means in this case. Diamond Hill returns are very sensitive to returns on the market. As the market goes up or down, Diamond Hill is expected to follow.
3 Months Beta |Analyze Diamond Hill Inv Demand Trend
Check current 90 days Diamond Hill correlation with market (DOW)

Diamond Beta

    
  0.95  
Diamond standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. Typical volatile equity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.

Standard Deviation

    
  1.92  
It is essential to understand the difference between upside risk (as represented by Diamond Hill's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Diamond Hill stock's daily returns or price. Since the actual investment returns on holding a position in Diamond Hill stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Diamond Hill.

Diamond Hill Inv Stock Volatility Analysis

Volatility refers to the frequency at which Diamond Hill stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Diamond Hill's price changes. Investors will then calculate the volatility of Diamond Hill's stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Diamond Hill's volatility:

Historical Volatility

This type of stock volatility measures Diamond Hill's fluctuations based on previous trends. It's commonly used to predict Diamond Hill's future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.

Implied Volatility

This type of volatility provides a positive outlook on future price fluctuations for Diamond Hill's current market price. This means that the stock will return to its initially predicted market price.
Transformation
The output start index for this execution was zero with a total number of output elements of sixty-one. The Median Price line plots median indexes of Diamond Hill Inv price series.
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Diamond Hill Projected Return Density Against Market

Given the investment horizon of 90 days Diamond Hill has a beta of 0.9458 suggesting Diamond Hill Inv market returns are highly reactive to returns on the market. As the market goes up or down, Diamond Hill is expected to follow.
Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Diamond Hill or Financial Services sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Diamond Hill stock's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Diamond stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
The company has an alpha of 0.1032, implying that it can generate a 0.1 percent excess return over DOW after adjusting for the inherited market risk (beta).
 Predicted Return Density 
      Returns 
Diamond Hill's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how Diamond Hill stock's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives a Company's Stock Price Volatility?

Several factors can influence a company's stock volatility:

Industry

Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.

Political and Economic environment

When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.

The Company's Performance

Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.

Diamond Hill Stock Risk Measures

Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Diamond Hill or Financial Services sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Diamond Hill stock's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Diamond stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
Given the investment horizon of 90 days the coefficient of variation of Diamond Hill is -8727.77. The daily returns are distributed with a variance of 3.68 and standard deviation of 1.92. The mean deviation of Diamond Hill Inv is currently at 1.5. For similar time horizon, the selected benchmark (DOW) has volatility of 1.42
α
Alpha over DOW
0.10
β
Beta against DOW0.95
σ
Overall volatility
1.92
Ir
Information ratio 0.06

Diamond Hill Stock Return Volatility

Diamond Hill historical daily return volatility represents how much Diamond Hill stock's price daily returns swing around its mean daily price change - it is a statistical measure of its dispersion of returns. The company inherits 1.9182% risk (volatility on return distribution) over the 90 days horizon. By contrast, DOW inherits 1.4607% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
      Timeline 

About Diamond Hill Volatility

Volatility is a rate at which the price of Diamond Hill or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Diamond Hill may increase or decrease. In other words, similar to Diamond's beta indicator, it measures the risk of Diamond Hill and helps estimate the fluctuations that may happen in a short period of time. So if prices of Diamond Hill fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.
Last ReportedProjected for 2022
Market Capitalization616 M611 M
Diamond Hill Investment Group, Inc., through its subsidiary, Diamond Hill Capital Management, Inc., provides investment advisory and fund administration services in the United States. The company was founded in 1990 and is based in Columbus, Ohio. Diamond Hill operates under Asset Management classification in the United States and is traded on NASDAQ Exchange. It employs 128 people.

Diamond Hill Investment Opportunity

Diamond Hill Inv has a volatility of 1.92 and is 1.32 times more volatile than DOW. 16  of all equities and portfolios are less risky than Diamond Hill. Compared to the overall equity markets, volatility of historical daily returns of Diamond Hill Inv is lower than 16 () of all global equities and portfolios over the last 90 days. Use Diamond Hill Inv to enhance the returns of your portfolios. The stock experiences a normal upward fluctuation. Check odds of Diamond Hill to be traded at $186.17 in 90 days. . Let's try to break down what Diamond's beta means in this case. Diamond Hill returns are very sensitive to returns on the market. As the market goes up or down, Diamond Hill is expected to follow.

Poor diversification

The correlation between Diamond Hill Inv and DJI is Poor diversification for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Inv and DJI in the same portfolio, assuming nothing else is changed.

Diamond Hill Additional Risk Indicators

The analysis of Diamond Hill's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Diamond Hill's investment and either accepting that risk or mitigating it. Along with some common measures of Diamond Hill stock risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
Risk Adjusted Performance(0.049448)
Market Risk Adjusted Performance(0.08)
Mean Deviation1.53
Coefficient Of Variation(2,722)
Standard Deviation1.94
Variance3.78
Information Ratio0.0585
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stock investments, we recommend comparing similar equities with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

Diamond Hill Suggested Diversification Pairs

Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Diamond Hill as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Diamond Hill's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Diamond Hill's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Diamond Hill Inv.
Continue to Investing Opportunities. Note that the Diamond Hill Inv information on this page should be used as a complementary analysis to other Diamond Hill's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

Complementary Tools for Diamond Stock analysis

When running Diamond Hill Inv price analysis, check to measure Diamond Hill's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Diamond Hill is operating at the current time. Most of Diamond Hill's value examination focuses on studying past and present price action to predict the probability of Diamond Hill's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Diamond Hill's price. Additionally, you may evaluate how the addition of Diamond Hill to your portfolios can decrease your overall portfolio volatility.
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Is Diamond Hill's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Diamond Hill. If investors know Diamond will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Diamond Hill listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Diamond Hill Inv is measured differently than its book value, which is the value of Diamond that is recorded on the company's balance sheet. Investors also form their own opinion of Diamond Hill's value that differs from its market value or its book value, called intrinsic value, which is Diamond Hill's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Diamond Hill's market value can be influenced by many factors that don't directly affect Diamond Hill's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Diamond Hill's value and its price as these two are different measures arrived at by different means. Investors typically determine Diamond Hill value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Diamond Hill's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.