Correlation Between Gamma Communications and DICKER DATA
Can any of the company-specific risk be diversified away by investing in both Gamma Communications and DICKER DATA 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 Gamma Communications and DICKER DATA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamma Communications plc and DICKER DATA LTD, you can compare the effects of market volatilities on Gamma Communications and DICKER DATA 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 Gamma Communications with a short position of DICKER DATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and DICKER DATA.
Diversification Opportunities for Gamma Communications and DICKER DATA
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gamma and DICKER is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications plc and DICKER DATA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKER DATA LTD and Gamma Communications 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 Gamma Communications plc are associated (or correlated) with DICKER DATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKER DATA LTD has no effect on the direction of Gamma Communications i.e., Gamma Communications and DICKER DATA go up and down completely randomly.
Pair Corralation between Gamma Communications and DICKER DATA
Assuming the 90 days horizon Gamma Communications plc is expected to generate 1.19 times more return on investment than DICKER DATA. However, Gamma Communications is 1.19 times more volatile than DICKER DATA LTD. It trades about 0.07 of its potential returns per unit of risk. DICKER DATA LTD is currently generating about -0.04 per unit of risk. If you would invest 1,794 in Gamma Communications plc on September 2, 2024 and sell it today you would earn a total of 156.00 from holding Gamma Communications plc or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamma Communications plc vs. DICKER DATA LTD
Performance |
| Timeline |
| Gamma Communications plc |
| DICKER DATA LTD |
Gamma Communications and DICKER DATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and DICKER DATA
The main advantage of trading using opposite Gamma Communications and DICKER DATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications position performs unexpectedly, DICKER DATA 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 DICKER DATA will offset losses from the drop in DICKER DATA's long position.| Gamma Communications vs. BJs Wholesale Club | Gamma Communications vs. ARDAGH METAL PACDL 0001 | Gamma Communications vs. Lendlease Group | Gamma Communications vs. PARKEN Sport Entertainment |
| DICKER DATA vs. Chongqing Machinery Electric | DICKER DATA vs. Australian Agricultural | DICKER DATA vs. ALGOMA STEEL GROUP | DICKER DATA vs. Caltagirone SpA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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