Correlation Between Dicker Data and Skycity Entertainment
Can any of the company-specific risk be diversified away by investing in both Dicker Data and Skycity Entertainment 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 Skycity Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicker Data and Skycity Entertainment Group, you can compare the effects of market volatilities on Dicker Data and Skycity Entertainment 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 Skycity Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicker Data and Skycity Entertainment.
Diversification Opportunities for Dicker Data and Skycity Entertainment
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dicker and Skycity is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Dicker Data and Skycity Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skycity Entertainment 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 Skycity Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skycity Entertainment has no effect on the direction of Dicker Data i.e., Dicker Data and Skycity Entertainment go up and down completely randomly.
Pair Corralation between Dicker Data and Skycity Entertainment
Assuming the 90 days trading horizon Dicker Data is expected to under-perform the Skycity Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Dicker Data is 1.47 times less risky than Skycity Entertainment. The stock trades about -0.1 of its potential returns per unit of risk. The Skycity Entertainment Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 122.00 in Skycity Entertainment Group on August 25, 2024 and sell it today you would earn a total of 8.00 from holding Skycity Entertainment Group or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dicker Data vs. Skycity Entertainment Group
Performance |
| Timeline |
| Dicker Data |
| Skycity Entertainment |
Dicker Data and Skycity Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicker Data and Skycity Entertainment
The main advantage of trading using opposite Dicker Data and Skycity Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicker Data position performs unexpectedly, Skycity Entertainment 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 Skycity Entertainment will offset losses from the drop in Skycity Entertainment's long position.| Dicker Data vs. Greenvale Energy | Dicker Data vs. Summit Resources Limited | Dicker Data vs. Ecofibre | Dicker Data vs. iShares Global Healthcare |
| Skycity Entertainment vs. DY6 Metals | Skycity Entertainment vs. Aeris Environmental | Skycity Entertainment vs. Queste Communications | Skycity Entertainment vs. Alto Metals |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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