Correlation Between Dicker Data and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Dicker Data and Aurelia Metals 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 Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicker Data and Aurelia Metals, you can compare the effects of market volatilities on Dicker Data and Aurelia Metals 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 Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicker Data and Aurelia Metals.
Diversification Opportunities for Dicker Data and Aurelia Metals
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dicker and Aurelia is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Dicker Data and Aurelia Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals 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 Aurelia Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelia Metals has no effect on the direction of Dicker Data i.e., Dicker Data and Aurelia Metals go up and down completely randomly.
Pair Corralation between Dicker Data and Aurelia Metals
Assuming the 90 days trading horizon Dicker Data is expected to generate 0.33 times more return on investment than Aurelia Metals. However, Dicker Data is 3.07 times less risky than Aurelia Metals. It trades about -0.08 of its potential returns per unit of risk. Aurelia Metals is currently generating about -0.04 per unit of risk. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dicker Data vs. Aurelia Metals
Performance |
| Timeline |
| Dicker Data |
| Aurelia Metals |
Dicker Data and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicker Data and Aurelia Metals
The main advantage of trading using opposite Dicker Data and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicker Data position performs unexpectedly, Aurelia Metals 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 Aurelia Metals will offset losses from the drop in Aurelia Metals' long position.| Dicker Data vs. Australian Unity Office | Dicker Data vs. Phoslock Environmental Technologies | Dicker Data vs. Vulcan Steel | Dicker Data vs. Medical Developments International |
| Aurelia Metals vs. Aristocrat Leisure | Aurelia Metals vs. Genetic Technologies | Aurelia Metals vs. Thorney Technologies | Aurelia Metals vs. Ras Technology Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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