Correlation Between Australian Unity and Dicker Data
Can any of the company-specific risk be diversified away by investing in both Australian Unity 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 Australian Unity and Dicker Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Unity Office and Dicker Data, you can compare the effects of market volatilities on Australian Unity 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 Australian Unity with a short position of Dicker Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Unity and Dicker Data.
Diversification Opportunities for Australian Unity and Dicker Data
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Australian and Dicker is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Australian Unity Office and Dicker Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicker Data and Australian Unity 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 Australian Unity Office 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 Australian Unity i.e., Australian Unity and Dicker Data go up and down completely randomly.
Pair Corralation between Australian Unity and Dicker Data
Assuming the 90 days trading horizon Australian Unity Office is expected to under-perform the Dicker Data. But the stock apears to be less risky and, when comparing its historical volatility, Australian Unity Office is 1.09 times less risky than Dicker Data. The stock trades about -0.2 of its potential returns per unit of risk. The Dicker Data is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 859.00 in Dicker Data on August 29, 2024 and sell it today you would lose (21.00) from holding Dicker Data or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Unity Office vs. Dicker Data
Performance |
| Timeline |
| Australian Unity Office |
| Dicker Data |
Australian Unity and Dicker Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Unity and Dicker Data
The main advantage of trading using opposite Australian Unity and Dicker Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Unity 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.| Australian Unity vs. Clime Investment Management | Australian Unity vs. ACDC Metals | Australian Unity vs. Group 6 Metals | Australian Unity vs. Neurotech International |
| Dicker Data vs. Australian Unity Office | Dicker Data vs. Phoslock Environmental Technologies | Dicker Data vs. Vulcan Steel | Dicker Data vs. Medical Developments International |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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