Correlation Between ARN Media and Dicker Data
Can any of the company-specific risk be diversified away by investing in both ARN Media 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 ARN Media and Dicker Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARN Media Limited and Dicker Data, you can compare the effects of market volatilities on ARN Media 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 ARN Media with a short position of Dicker Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARN Media and Dicker Data.
Diversification Opportunities for ARN Media and Dicker Data
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ARN and Dicker is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ARN Media Limited and Dicker Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicker Data and ARN Media 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 ARN Media Limited 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 has no effect on the direction of ARN Media i.e., ARN Media and Dicker Data go up and down completely randomly.
Pair Corralation between ARN Media and Dicker Data
Assuming the 90 days trading horizon ARN Media Limited is expected to generate 1.94 times more return on investment than Dicker Data. However, ARN Media is 1.94 times more volatile than Dicker Data. It trades about 0.02 of its potential returns per unit of risk. Dicker Data is currently generating about -0.04 per unit of risk. If you would invest 72.00 in ARN Media Limited on September 3, 2024 and sell it today you would earn a total of 0.00 from holding ARN Media Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARN Media Limited vs. Dicker Data
Performance |
| Timeline |
| ARN Media Limited |
| Dicker Data |
ARN Media and Dicker Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARN Media and Dicker Data
The main advantage of trading using opposite ARN Media and Dicker Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARN Media 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.| ARN Media vs. Qbe Insurance Group | ARN Media vs. AiMedia Technologies | ARN Media vs. COAST ENTERTAINMENT HOLDINGS | ARN Media vs. Nufarm Finance NZ |
| Dicker Data vs. Stelar Metals | Dicker Data vs. MetalsGrove Mining | Dicker Data vs. Perseus Mining | Dicker Data vs. Infomedia |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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