Correlation Between ACDC Metals and Dicker Data
Can any of the company-specific risk be diversified away by investing in both ACDC Metals 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 ACDC Metals and Dicker Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACDC Metals and Dicker Data, you can compare the effects of market volatilities on ACDC Metals 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 ACDC Metals with a short position of Dicker Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACDC Metals and Dicker Data.
Diversification Opportunities for ACDC Metals and Dicker Data
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ACDC and Dicker is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding ACDC Metals and Dicker Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicker Data and ACDC Metals 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 ACDC Metals 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 ACDC Metals i.e., ACDC Metals and Dicker Data go up and down completely randomly.
Pair Corralation between ACDC Metals and Dicker Data
Assuming the 90 days trading horizon ACDC Metals is expected to generate 68.38 times less return on investment than Dicker Data. In addition to that, ACDC Metals is 2.27 times more volatile than Dicker Data. It trades about 0.0 of its total potential returns per unit of risk. Dicker Data is currently generating about 0.03 per unit of volatility. If you would invest 740.00 in Dicker Data on September 12, 2024 and sell it today you would earn a total of 99.00 from holding Dicker Data or generate 13.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACDC Metals vs. Dicker Data
Performance |
| Timeline |
| ACDC Metals |
| Dicker Data |
ACDC Metals and Dicker Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACDC Metals and Dicker Data
The main advantage of trading using opposite ACDC Metals and Dicker Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACDC Metals 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.| ACDC Metals vs. Northern Star Resources | ACDC Metals vs. Evolution Mining | ACDC Metals vs. Bluescope Steel | ACDC Metals vs. Sandfire Resources NL |
| Dicker Data vs. Aneka Tambang Tbk | Dicker Data vs. BHP Group Limited | Dicker Data vs. Commonwealth Bank | Dicker Data vs. Commonwealth Bank of |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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