Correlation Between DICKER DATA and Equifax

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

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

Diversification Opportunities for DICKER DATA and Equifax

0.61

Correlation Coefficient

DICKER DATA  Equifax

Poor diversification

The 3 months correlation between DICKER and Equifax is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding DICKER DATA LTD and Equifax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equifax and DICKER DATA 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 DICKER DATA LTD are associated (or correlated) with Equifax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equifax has no effect on the direction of DICKER DATA i.e., DICKER DATA and Equifax go up and down completely randomly.

Pair Corralation between DICKER DATA and Equifax

Assuming the 90 days horizon DICKER DATA LTD is expected to under-perform the Equifax. In addition to that, DICKER DATA is 1.35 times more volatile than Equifax. It trades about -0.02 of its total potential returns per unit of risk. Equifax is currently generating about 0.07 per unit of volatility. If you would invest  21,733  in Equifax on September 30, 2024 and sell it today you would earn a total of  2,867  from holding Equifax or generate 13.19% return on investment over 90 days.

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

DICKER DATA LTD  vs.  Equifax

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.

Equifax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Equifax has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Equifax is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with DICKER DATA and Equifax

The main advantage of trading using opposite DICKER DATA and Equifax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKER DATA position performs unexpectedly, Equifax 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 Equifax will offset losses from the drop in Equifax's long position.

The idea behind DICKER DATA LTD and Equifax 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.