Correlation Between Dicker Data and Ecofibre
Can any of the company-specific risk be diversified away by investing in both Dicker Data and Ecofibre 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 Ecofibre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicker Data and Ecofibre, you can compare the effects of market volatilities on Dicker Data and Ecofibre 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 Ecofibre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicker Data and Ecofibre.
Diversification Opportunities for Dicker Data and Ecofibre
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dicker and Ecofibre is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dicker Data and Ecofibre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofibre 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 Ecofibre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofibre has no effect on the direction of Dicker Data i.e., Dicker Data and Ecofibre go up and down completely randomly.
Pair Corralation between Dicker Data and Ecofibre
Assuming the 90 days trading horizon Dicker Data is expected to generate 5.18 times less return on investment than Ecofibre. But when comparing it to its historical volatility, Dicker Data is 5.93 times less risky than Ecofibre. It trades about 0.03 of its potential returns per unit of risk. Ecofibre is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Ecofibre on October 28, 2024 and sell it today you would earn a total of 0.00 from holding Ecofibre or generate 0.0% 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. Ecofibre
Performance |
| Timeline |
| Dicker Data |
| Ecofibre |
Dicker Data and Ecofibre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicker Data and Ecofibre
The main advantage of trading using opposite Dicker Data and Ecofibre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicker Data position performs unexpectedly, Ecofibre 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 Ecofibre will offset losses from the drop in Ecofibre's long position.| Dicker Data vs. Djerriwarrh Investments | Dicker Data vs. Alternative Investment Trust | Dicker Data vs. Argo Investments | Dicker Data vs. Hutchison Telecommunications |
| Ecofibre vs. My Foodie Box | Ecofibre vs. Playside Studios | Ecofibre vs. Pinnacle Investment Management | Ecofibre vs. Autosports Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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