Correlation Between Star Entertainment and Dicker Data
Can any of the company-specific risk be diversified away by investing in both Star Entertainment 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 Star Entertainment and Dicker Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Entertainment Group and Dicker Data, you can compare the effects of market volatilities on Star Entertainment 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 Star Entertainment with a short position of Dicker Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Entertainment and Dicker Data.
Diversification Opportunities for Star Entertainment and Dicker Data
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Star and Dicker is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Star Entertainment Group and Dicker Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicker Data and Star Entertainment 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 Star Entertainment 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 Star Entertainment i.e., Star Entertainment and Dicker Data go up and down completely randomly.
Pair Corralation between Star Entertainment and Dicker Data
Assuming the 90 days trading horizon Star Entertainment Group is expected to under-perform the Dicker Data. In addition to that, Star Entertainment is 9.86 times more volatile than Dicker Data. It trades about -0.16 of its total potential returns per unit of risk. Dicker Data is currently generating about 0.05 per unit of volatility. If you would invest 842.00 in Dicker Data on October 25, 2024 and sell it today you would earn a total of 8.00 from holding Dicker Data or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Entertainment Group vs. Dicker Data
Performance |
| Timeline |
| Star Entertainment |
| Dicker Data |
Star Entertainment and Dicker Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Entertainment and Dicker Data
The main advantage of trading using opposite Star Entertainment and Dicker Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Entertainment 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.| Star Entertainment vs. Hudson Investment Group | Star Entertainment vs. G8 Education | Star Entertainment vs. Charter Hall Education | Star Entertainment vs. Djerriwarrh Investments |
| Dicker Data vs. Centuria Industrial Reit | Dicker Data vs. Bluescope Steel | Dicker Data vs. Champion Iron | Dicker Data vs. Aeris Environmental |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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