Correlation Between Dicker Data and Microequities Asset
Can any of the company-specific risk be diversified away by investing in both Dicker Data and Microequities Asset 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 Microequities Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicker Data and Microequities Asset Management, you can compare the effects of market volatilities on Dicker Data and Microequities Asset 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 Microequities Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicker Data and Microequities Asset.
Diversification Opportunities for Dicker Data and Microequities Asset
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dicker and Microequities is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dicker Data and Microequities Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microequities Asset 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 Microequities Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microequities Asset has no effect on the direction of Dicker Data i.e., Dicker Data and Microequities Asset go up and down completely randomly.
Pair Corralation between Dicker Data and Microequities Asset
Assuming the 90 days trading horizon Dicker Data is expected to generate 0.62 times more return on investment than Microequities Asset. However, Dicker Data is 1.61 times less risky than Microequities Asset. It trades about 0.02 of its potential returns per unit of risk. Microequities Asset Management is currently generating about -0.03 per unit of risk. If you would invest 857.00 in Dicker Data on August 30, 2024 and sell it today you would earn a total of 3.00 from holding Dicker Data or generate 0.35% 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. Microequities Asset Management
Performance |
| Timeline |
| Dicker Data |
| Microequities Asset |
Dicker Data and Microequities Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicker Data and Microequities Asset
The main advantage of trading using opposite Dicker Data and Microequities Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicker Data position performs unexpectedly, Microequities Asset 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 Microequities Asset will offset losses from the drop in Microequities Asset's long position.| Dicker Data vs. PVW Resources | Dicker Data vs. Woolworths | Dicker Data vs. Wesfarmers | Dicker Data vs. Coles Group |
| Microequities Asset vs. Champion Iron | Microequities Asset vs. Ridley | Microequities Asset vs. Peel Mining | Microequities Asset vs. Australian Dairy Farms |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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