Correlation Between Dicker Data and Wt Financial
Can any of the company-specific risk be diversified away by investing in both Dicker Data and Wt 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 Wt 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 Wt Financial Group, you can compare the effects of market volatilities on Dicker Data and Wt 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 Wt Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicker Data and Wt Financial.
Diversification Opportunities for Dicker Data and Wt Financial
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dicker and WTL is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dicker Data and Wt Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wt 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 Wt Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wt Financial Group has no effect on the direction of Dicker Data i.e., Dicker Data and Wt Financial go up and down completely randomly.
Pair Corralation between Dicker Data and Wt Financial
Assuming the 90 days trading horizon Dicker Data is expected to generate 2.43 times less return on investment than Wt Financial. But when comparing it to its historical volatility, Dicker Data is 1.7 times less risky than Wt Financial. It trades about 0.02 of its potential returns per unit of risk. Wt Financial Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7.48 in Wt Financial Group on September 2, 2024 and sell it today you would earn a total of 1.52 from holding Wt Financial Group or generate 20.32% 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. Wt Financial Group
Performance |
| Timeline |
| Dicker Data |
| Wt Financial Group |
Dicker Data and Wt Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dicker Data and Wt Financial
The main advantage of trading using opposite Dicker Data and Wt Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicker Data position performs unexpectedly, Wt 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 Wt Financial will offset losses from the drop in Wt Financial's long position.| Dicker Data vs. Accent Resources NL | Dicker Data vs. Hutchison Telecommunications | Dicker Data vs. Energy Resources | Dicker Data vs. GO2 People |
| Wt Financial vs. WA1 Resources | Wt Financial vs. Predictive Discovery | Wt Financial vs. Cooper Metals | Wt Financial vs. OD6 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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