"Ring formation" is a more accurate translation, and 輪形陣 is translated as "ring formation" in the Combined Fleet article.
It's just, well, with only 6 ships (or 5) the ring formation ends up looking more like a diamond formation. Strictly speaking this is untrue. The most basic diamond formation has 4 ships:
_1_
2_3
_4_
Each ship is positioned diagonally away from each other, at a 45 degree angle (and not the 90 degree seen in 輪形陣) It's basically a modified column formation.
With five ships, the fifth ship is placed diagonally aft and to the starboard side of the rearmost ship:
_1_
2_3
_4_
__5
The sixth ship goes to the port side:
_1_
2_3
_4_
6_5
And the seventh is placed on the main axis, to the rear of the fourth ship:
_1_
2_3
_4_
6_5
_7_
...completing the second diamond.
Basically, odd-numbered ships are placed on the starboard (right) side, while even numbered are placed on the port (right) side, with the exception of the first ships and every third ship after it (1st, 4th, 7th, 10th, etc.).
Obviously, 輪形陣 is intended to mean "ring formation", as a 5-membered diamond formation is different than pictured above. Furthermore, a diamond formation only requires a minimum of four ships. 輪形陣 requires 5, as befits a formation requiring a ring of escort ships protecting the center.
