Correlation Between SBA Communications and DICKER DATA

Can any of the company-specific risk be diversified away by investing in both SBA Communications 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 SBA Communications and DICKER DATA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SBA Communications Corp and DICKER DATA LTD, you can compare the effects of market volatilities on SBA Communications 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 SBA Communications with a short position of DICKER DATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBA Communications and DICKER DATA.

Diversification Opportunities for SBA Communications and DICKER DATA

0.48

Correlation Coefficient

SBA Communications  DICKER DATA

Very weak diversification

The 3 months correlation between SBA and DICKER is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SBA Communications Corp and DICKER DATA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKER DATA LTD and SBA Communications 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 SBA Communications Corp 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 LTD has no effect on the direction of SBA Communications i.e., SBA Communications and DICKER DATA go up and down completely randomly.

Pair Corralation between SBA Communications and DICKER DATA

Assuming the 90 days trading horizon SBA Communications Corp is expected to generate 0.93 times more return on investment than DICKER DATA. However, SBA Communications Corp is 1.07 times less risky than DICKER DATA. It trades about -0.07 of its potential returns per unit of risk. DICKER DATA LTD is currently generating about -0.09 per unit of risk. If you would invest  21,179  in SBA Communications Corp on September 27, 2024 and sell it today you would lose (1,664) from holding SBA Communications Corp or give up 7.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SBA Communications Corp  vs.  DICKER DATA LTD

SBA Communications Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SBA Communications Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

DICKER DATA LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DICKER DATA LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SBA Communications and DICKER DATA

The main advantage of trading using opposite SBA Communications and DICKER DATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBA Communications 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.

The idea behind SBA Communications Corp and DICKER DATA LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.