Correlation Between Dicker Data and Australian Unity
Can any of the company-specific risk be diversified away by investing in both Dicker Data and Australian Unity 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 Australian Unity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicker Data and Australian Unity Ltd, you can compare the effects of market volatilities on Dicker Data and Australian Unity 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 Australian Unity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicker Data and Australian Unity.
Diversification Opportunities for Dicker Data and Australian Unity
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dicker and Australian is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dicker Data and Australian Unity Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Unity 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 Australian Unity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Unity has no effect on the direction of Dicker Data i.e., Dicker Data and Australian Unity go up and down completely randomly.
Pair Corralation between Dicker Data and Australian Unity
Assuming the 90 days trading horizon Dicker Data is expected to generate 2.76 times more return on investment than Australian Unity. However, Dicker Data is 2.76 times more volatile than Australian Unity Ltd. It trades about 0.0 of its potential returns per unit of risk. Australian Unity Ltd is currently generating about -0.04 per unit of risk. If you would invest 852.00 in Dicker Data on September 1, 2024 and sell it today you would lose (1.00) from holding Dicker Data or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dicker Data vs. Australian Unity Ltd
Performance |
| Timeline |
| Dicker Data |
| Australian Unity |
Dicker Data and Australian Unity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicker Data and Australian Unity
The main advantage of trading using opposite Dicker Data and Australian Unity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicker Data position performs unexpectedly, Australian Unity 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 Australian Unity will offset losses from the drop in Australian Unity's long position.| Dicker Data vs. K2 Asset Management | Dicker Data vs. Homeco Daily Needs | Dicker Data vs. Home Consortium | Dicker Data vs. Alternative Investment Trust |
| Australian Unity vs. Home Consortium | Australian Unity vs. Clime Investment Management | Australian Unity vs. Argo Investments | Australian Unity vs. Pinnacle Investment Management |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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