Correlation Between Ecofibre and Dicker Data
Can any of the company-specific risk be diversified away by investing in both Ecofibre and Dicker Data 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 Ecofibre and Dicker Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecofibre and Dicker Data, you can compare the effects of market volatilities on Ecofibre and Dicker Data 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 Ecofibre with a short position of Dicker Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecofibre and Dicker Data.
Diversification Opportunities for Ecofibre and Dicker Data
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ecofibre and Dicker is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ecofibre and Dicker Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicker Data and Ecofibre 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 Ecofibre are associated (or correlated) with Dicker Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dicker Data has no effect on the direction of Ecofibre i.e., Ecofibre and Dicker Data go up and down completely randomly.
Pair Corralation between Ecofibre and Dicker Data
Assuming the 90 days trading horizon Ecofibre is expected to under-perform the Dicker Data. In addition to that, Ecofibre is 3.82 times more volatile than Dicker Data. It trades about -0.01 of its total potential returns per unit of risk. Dicker Data is currently generating about 0.02 per unit of volatility. If you would invest 778.00 in Dicker Data on August 29, 2024 and sell it today you would earn a total of 60.00 from holding Dicker Data or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecofibre vs. Dicker Data
Performance |
| Timeline |
| Ecofibre |
| Dicker Data |
Ecofibre and Dicker Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecofibre and Dicker Data
The main advantage of trading using opposite Ecofibre and Dicker Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecofibre position performs unexpectedly, Dicker Data 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 Dicker Data will offset losses from the drop in Dicker Data's long position.| Ecofibre vs. Energy Resources | Ecofibre vs. 88 Energy | Ecofibre vs. Amani Gold | Ecofibre vs. A1 Investments Resources |
| Dicker Data vs. Australian Unity Office | Dicker Data vs. Phoslock Environmental Technologies | Dicker Data vs. Vulcan Steel | Dicker Data vs. Medical Developments International |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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