Correlation Between Aussie Broadband and Dicker Data
Can any of the company-specific risk be diversified away by investing in both Aussie Broadband 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 Aussie Broadband and Dicker Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aussie Broadband and Dicker Data, you can compare the effects of market volatilities on Aussie Broadband 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 Aussie Broadband with a short position of Dicker Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aussie Broadband and Dicker Data.
Diversification Opportunities for Aussie Broadband and Dicker Data
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aussie and Dicker is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aussie Broadband and Dicker Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicker Data and Aussie Broadband 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 Aussie Broadband 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 Aussie Broadband i.e., Aussie Broadband and Dicker Data go up and down completely randomly.
Pair Corralation between Aussie Broadband and Dicker Data
Assuming the 90 days trading horizon Aussie Broadband is expected to generate 2.07 times more return on investment than Dicker Data. However, Aussie Broadband is 2.07 times more volatile than Dicker Data. It trades about 0.27 of its potential returns per unit of risk. Dicker Data is currently generating about 0.05 per unit of risk. If you would invest 354.00 in Aussie Broadband on November 3, 2024 and sell it today you would earn a total of 40.00 from holding Aussie Broadband or generate 11.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aussie Broadband vs. Dicker Data
Performance |
| Timeline |
| Aussie Broadband |
| Dicker Data |
Aussie Broadband and Dicker Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aussie Broadband and Dicker Data
The main advantage of trading using opposite Aussie Broadband and Dicker Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aussie Broadband 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.| Aussie Broadband vs. Spirit Telecom | Aussie Broadband vs. Finexia Financial Group | Aussie Broadband vs. Maggie Beer Holdings | Aussie Broadband vs. Liberty Financial Group |
| Dicker Data vs. Argo Investments | Dicker Data vs. Carlton Investments | Dicker Data vs. Hudson Investment Group | Dicker Data vs. Hotel Property Investments |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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