Correlation Between Insurance Australia and Dicker Data
Can any of the company-specific risk be diversified away by investing in both Insurance Australia 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 Insurance Australia and Dicker Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insurance Australia Group and Dicker Data, you can compare the effects of market volatilities on Insurance Australia 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 Insurance Australia with a short position of Dicker Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and Dicker Data.
Diversification Opportunities for Insurance Australia and Dicker Data
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Insurance and Dicker is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and Dicker Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicker Data and Insurance Australia 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 Insurance Australia Group 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 Insurance Australia i.e., Insurance Australia and Dicker Data go up and down completely randomly.
Pair Corralation between Insurance Australia and Dicker Data
Assuming the 90 days trading horizon Insurance Australia Group is expected to generate 0.73 times more return on investment than Dicker Data. However, Insurance Australia Group is 1.36 times less risky than Dicker Data. It trades about 0.09 of its potential returns per unit of risk. Dicker Data is currently generating about 0.03 per unit of risk. If you would invest 440.00 in Insurance Australia Group on November 19, 2024 and sell it today you would earn a total of 341.00 from holding Insurance Australia Group or generate 77.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insurance Australia Group vs. Dicker Data
Performance |
| Timeline |
| Insurance Australia |
| Dicker Data |
Insurance Australia and Dicker Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and Dicker Data
The main advantage of trading using opposite Insurance Australia and Dicker Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia 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.| Insurance Australia vs. Macquarie Bank Limited | Insurance Australia vs. Perpetual Credit Income | Insurance Australia vs. Collins Foods | Insurance Australia vs. Queste Communications |
| Dicker Data vs. A1 Investments Resources | Dicker Data vs. Kip McGrath Education | Dicker Data vs. Qbe Insurance Group | Dicker Data vs. Beam Communications Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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