Correlation Between National Australia and Dicker Data
Can any of the company-specific risk be diversified away by investing in both National 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 National 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 National Australia Bank and Dicker Data, you can compare the effects of market volatilities on National 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 National Australia with a short position of Dicker Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Australia and Dicker Data.
Diversification Opportunities for National Australia and Dicker Data
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Dicker is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding National Australia Bank and Dicker Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicker Data and National 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 National Australia Bank 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 National Australia i.e., National Australia and Dicker Data go up and down completely randomly.
Pair Corralation between National Australia and Dicker Data
Assuming the 90 days trading horizon National Australia Bank is expected to under-perform the Dicker Data. But the preferred stock apears to be less risky and, when comparing its historical volatility, National Australia Bank is 6.19 times less risky than Dicker Data. The preferred stock trades about -0.03 of its potential returns per unit of risk. The Dicker Data is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 852.00 in Dicker Data on November 3, 2024 and sell it today you would earn a total of 8.00 from holding Dicker Data or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Australia Bank vs. Dicker Data
Performance |
| Timeline |
| National Australia Bank |
| Dicker Data |
National Australia and Dicker Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Australia and Dicker Data
The main advantage of trading using opposite National Australia and Dicker Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National 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.| National Australia vs. Sky Metals | National Australia vs. Alternative Investment Trust | National Australia vs. FireFly Metals | National Australia vs. Aussie Broadband |
| Dicker Data vs. Argo Investments | Dicker Data vs. Carlton Investments | Dicker Data vs. Hudson Investment Group | Dicker Data vs. Hotel Property Investments |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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