Correlation Between Aristocrat Leisure and Dicker Data
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure 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 Aristocrat Leisure and Dicker Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure and Dicker Data, you can compare the effects of market volatilities on Aristocrat Leisure 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 Aristocrat Leisure with a short position of Dicker Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and Dicker Data.
Diversification Opportunities for Aristocrat Leisure and Dicker Data
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aristocrat and Dicker is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure and Dicker Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicker Data and Aristocrat Leisure 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 Aristocrat Leisure 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 Aristocrat Leisure i.e., Aristocrat Leisure and Dicker Data go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and Dicker Data
Assuming the 90 days trading horizon Aristocrat Leisure is expected to generate 0.67 times more return on investment than Dicker Data. However, Aristocrat Leisure is 1.49 times less risky than Dicker Data. It trades about 0.43 of its potential returns per unit of risk. Dicker Data is currently generating about 0.0 per unit of risk. If you would invest 6,114 in Aristocrat Leisure on September 1, 2024 and sell it today you would earn a total of 661.00 from holding Aristocrat Leisure or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aristocrat Leisure vs. Dicker Data
Performance |
| Timeline |
| Aristocrat Leisure |
| Dicker Data |
Aristocrat Leisure and Dicker Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and Dicker Data
The main advantage of trading using opposite Aristocrat Leisure and Dicker Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure 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.| Aristocrat Leisure vs. iShares Global Healthcare | Aristocrat Leisure vs. Australian Dairy Farms | Aristocrat Leisure vs. Adriatic Metals Plc | Aristocrat Leisure vs. Australian Agricultural |
| Dicker Data vs. K2 Asset Management | Dicker Data vs. Homeco Daily Needs | Dicker Data vs. Home Consortium | Dicker Data vs. Alternative Investment Trust |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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