Correlation Between Dicker Data and Regal Funds
Can any of the company-specific risk be diversified away by investing in both Dicker Data and Regal Funds 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 Regal Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicker Data and Regal Funds Management, you can compare the effects of market volatilities on Dicker Data and Regal Funds 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 Regal Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicker Data and Regal Funds.
Diversification Opportunities for Dicker Data and Regal Funds
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dicker and Regal is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dicker Data and Regal Funds Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Funds Management 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 Regal Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Funds Management has no effect on the direction of Dicker Data i.e., Dicker Data and Regal Funds go up and down completely randomly.
Pair Corralation between Dicker Data and Regal Funds
Assuming the 90 days trading horizon Dicker Data is expected to generate 14.5 times less return on investment than Regal Funds. But when comparing it to its historical volatility, Dicker Data is 1.45 times less risky than Regal Funds. It trades about 0.02 of its potential returns per unit of risk. Regal Funds Management is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 373.00 in Regal Funds Management on August 30, 2024 and sell it today you would earn a total of 30.00 from holding Regal Funds Management or generate 8.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dicker Data vs. Regal Funds Management
Performance |
| Timeline |
| Dicker Data |
| Regal Funds Management |
Dicker Data and Regal Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicker Data and Regal Funds
The main advantage of trading using opposite Dicker Data and Regal Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicker Data position performs unexpectedly, Regal Funds 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 Regal Funds will offset losses from the drop in Regal Funds' long position.| Dicker Data vs. PVW Resources | Dicker Data vs. Woolworths | Dicker Data vs. Wesfarmers | Dicker Data vs. Coles Group |
| Regal Funds vs. Champion Iron | Regal Funds vs. Ridley | Regal Funds vs. Peel Mining | Regal Funds 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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