Correlation Between DICKER DATA and FORTEC Elektronik

Can any of the company-specific risk be diversified away by investing in both DICKER DATA and FORTEC Elektronik 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 FORTEC Elektronik 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 FORTEC Elektronik AG, you can compare the effects of market volatilities on DICKER DATA and FORTEC Elektronik 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 FORTEC Elektronik. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKER DATA and FORTEC Elektronik.

Diversification Opportunities for DICKER DATA and FORTEC Elektronik

0.14

Correlation Coefficient

DICKER DATA  FORTEC Elektronik

Average diversification

The 3 months correlation between DICKER and FORTEC is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding DICKER DATA LTD and FORTEC Elektronik AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORTEC Elektronik 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 FORTEC Elektronik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORTEC Elektronik has no effect on the direction of DICKER DATA i.e., DICKER DATA and FORTEC Elektronik go up and down completely randomly.

Pair Corralation between DICKER DATA and FORTEC Elektronik

Assuming the 90 days horizon DICKER DATA LTD is expected to under-perform the FORTEC Elektronik. In addition to that, DICKER DATA is 1.25 times more volatile than FORTEC Elektronik AG. It trades about -0.02 of its total potential returns per unit of risk. FORTEC Elektronik AG is currently generating about -0.01 per unit of volatility. If you would invest  1,930  in FORTEC Elektronik AG on September 30, 2024 and sell it today you would lose (100.00) from holding FORTEC Elektronik AG or give up 5.18% of portfolio value over 90 days.

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

DICKER DATA LTD  vs.  FORTEC Elektronik AG

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.

FORTEC Elektronik

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FORTEC Elektronik AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, FORTEC Elektronik is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with DICKER DATA and FORTEC Elektronik

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

The idea behind DICKER DATA LTD and FORTEC Elektronik AG 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.