Correlation Between Dicker Data and Advanced Braking

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Can any of the company-specific risk be diversified away by investing in both Dicker Data and Advanced Braking 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 Advanced Braking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicker Data and Advanced Braking Technology, you can compare the effects of market volatilities on Dicker Data and Advanced Braking 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 Advanced Braking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicker Data and Advanced Braking.

Diversification Opportunities for Dicker Data and Advanced Braking

DickerAdvancedDiversified AwayDickerAdvancedDiversified Away100%
0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Dicker and Advanced is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dicker Data and Advanced Braking Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Braking Tec 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 are associated (or correlated) with Advanced Braking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Braking Tec has no effect on the direction of Dicker Data i.e., Dicker Data and Advanced Braking go up and down completely randomly.

Pair Corralation between Dicker Data and Advanced Braking

Assuming the 90 days trading horizon Dicker Data is expected to generate 1.18 times more return on investment than Advanced Braking. However, Dicker Data is 1.18 times more volatile than Advanced Braking Technology. It trades about 0.06 of its potential returns per unit of risk. Advanced Braking Technology is currently generating about -0.07 per unit of risk. If you would invest  851.00  in Dicker Data on November 25, 2024 and sell it today you would earn a total of  16.00  from holding Dicker Data or generate 1.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Dicker Data  vs.  Advanced Braking Technology

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505
JavaScript chart by amCharts 3.21.15DDR ABV
       Timeline  
Dicker Data 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Dicker Data are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Dicker Data is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb8.28.48.68.899.2
Advanced Braking Tec 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Advanced Braking Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Advanced Braking is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.080.0820.0840.0860.0880.09

Dicker Data and Advanced Braking Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.84-3.62-2.41-1.190.02021.192.413.644.876.09 0.050.100.15
JavaScript chart by amCharts 3.21.15DDR ABV
       Returns  

Pair Trading with Dicker Data and Advanced Braking

The main advantage of trading using opposite Dicker Data and Advanced Braking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicker Data position performs unexpectedly, Advanced Braking 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 Advanced Braking will offset losses from the drop in Advanced Braking's long position.
The idea behind Dicker Data and Advanced Braking Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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