Correlation Between Dicker Data and BNK Banking
Can any of the company-specific risk be diversified away by investing in both Dicker Data and BNK Banking 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 BNK Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicker Data and BNK Banking, you can compare the effects of market volatilities on Dicker Data and BNK Banking 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 BNK Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicker Data and BNK Banking.
Diversification Opportunities for Dicker Data and BNK Banking
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dicker and BNK is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dicker Data and BNK Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNK Banking 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 BNK Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNK Banking has no effect on the direction of Dicker Data i.e., Dicker Data and BNK Banking go up and down completely randomly.
Pair Corralation between Dicker Data and BNK Banking
Assuming the 90 days trading horizon Dicker Data is expected to generate 0.56 times more return on investment than BNK Banking. However, Dicker Data is 1.79 times less risky than BNK Banking. It trades about 0.02 of its potential returns per unit of risk. BNK Banking is currently generating about -0.02 per unit of risk. If you would invest 777.00 in Dicker Data on October 23, 2024 and sell it today you would earn a total of 63.00 from holding Dicker Data or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dicker Data vs. BNK Banking
Performance |
| Timeline |
| Dicker Data |
| BNK Banking |
Dicker Data and BNK Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicker Data and BNK Banking
The main advantage of trading using opposite Dicker Data and BNK Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicker Data position performs unexpectedly, BNK Banking 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 BNK Banking will offset losses from the drop in BNK Banking's long position.| Dicker Data vs. Hotel Property Investments | Dicker Data vs. Dynamic Drill And | Dicker Data vs. Gtn | Dicker Data vs. Nufarm |
| BNK Banking vs. Energy Resources | BNK Banking vs. 88 Energy | BNK Banking vs. A1 Investments Resources | BNK Banking vs. Coronado Global Resources |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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