Correlation Between Dicker Data and EP Financial
Can any of the company-specific risk be diversified away by investing in both Dicker Data and EP Financial 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 EP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicker Data and EP Financial Group, you can compare the effects of market volatilities on Dicker Data and EP Financial 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 EP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicker Data and EP Financial.
Diversification Opportunities for Dicker Data and EP Financial
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dicker and EP1 is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Dicker Data and EP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EP Financial Group 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 EP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EP Financial Group has no effect on the direction of Dicker Data i.e., Dicker Data and EP Financial go up and down completely randomly.
Pair Corralation between Dicker Data and EP Financial
Assuming the 90 days trading horizon Dicker Data is expected to under-perform the EP Financial. But the stock apears to be less risky and, when comparing its historical volatility, Dicker Data is 1.83 times less risky than EP Financial. The stock trades about -0.03 of its potential returns per unit of risk. The EP Financial Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 39.00 in EP Financial Group on September 1, 2024 and sell it today you would earn a total of 13.00 from holding EP Financial Group or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dicker Data vs. EP Financial Group
Performance |
| Timeline |
| Dicker Data |
| EP Financial Group |
Dicker Data and EP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicker Data and EP Financial
The main advantage of trading using opposite Dicker Data and EP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicker Data position performs unexpectedly, EP Financial 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 EP Financial will offset losses from the drop in EP Financial'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 |
| EP Financial vs. Navigator Global Investments | EP Financial vs. Collins Foods | EP Financial vs. Hotel Property Investments | EP Financial vs. Queste Communications |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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