Correlation Between DICKER DATA and EDISON INTL
Can any of the company-specific risk be diversified away by investing in both DICKER DATA and EDISON INTL 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 DICKER DATA and EDISON INTL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DICKER DATA LTD and EDISON INTL, you can compare the effects of market volatilities on DICKER DATA and EDISON INTL 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 DICKER DATA with a short position of EDISON INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKER DATA and EDISON INTL.
Diversification Opportunities for DICKER DATA and EDISON INTL
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DICKER and EDISON is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding DICKER DATA LTD and EDISON INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDISON INTL and DICKER DATA 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 DICKER DATA LTD are associated (or correlated) with EDISON INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDISON INTL has no effect on the direction of DICKER DATA i.e., DICKER DATA and EDISON INTL go up and down completely randomly.
Pair Corralation between DICKER DATA and EDISON INTL
Assuming the 90 days horizon DICKER DATA LTD is expected to under-perform the EDISON INTL. In addition to that, DICKER DATA is 2.09 times more volatile than EDISON INTL. It trades about -0.02 of its total potential returns per unit of risk. EDISON INTL is currently generating about 0.1 per unit of volatility. If you would invest 5,716 in EDISON INTL on September 15, 2024 and sell it today you would earn a total of 2,028 from holding EDISON INTL or generate 35.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
DICKER DATA LTD vs. EDISON INTL
Performance |
| Timeline |
| DICKER DATA LTD |
| EDISON INTL |
DICKER DATA and EDISON INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKER DATA and EDISON INTL
The main advantage of trading using opposite DICKER DATA and EDISON INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKER DATA position performs unexpectedly, EDISON INTL 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 EDISON INTL will offset losses from the drop in EDISON INTL's long position.| DICKER DATA vs. Arrow Electronics | DICKER DATA vs. KAGA EL LTD | DICKER DATA vs. Wayside Technology Group |
| EDISON INTL vs. DATAGROUP SE | EDISON INTL vs. DICKER DATA LTD | EDISON INTL vs. Data3 Limited | EDISON INTL vs. Automatic Data Processing |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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