Correlation Between Dicker Data and Clime Investment
Can any of the company-specific risk be diversified away by investing in both Dicker Data and Clime Investment 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 Clime Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dicker Data and Clime Investment Management, you can compare the effects of market volatilities on Dicker Data and Clime Investment 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 Clime Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicker Data and Clime Investment.
Diversification Opportunities for Dicker Data and Clime Investment
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dicker and Clime is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dicker Data and Clime Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clime Investment Man 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 are associated (or correlated) with Clime Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clime Investment Man has no effect on the direction of Dicker Data i.e., Dicker Data and Clime Investment go up and down completely randomly.
Pair Corralation between Dicker Data and Clime Investment
Assuming the 90 days trading horizon Dicker Data is expected to under-perform the Clime Investment. But the stock apears to be less risky and, when comparing its historical volatility, Dicker Data is 1.6 times less risky than Clime Investment. The stock trades about -0.05 of its potential returns per unit of risk. The Clime Investment Management is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Clime Investment Management on September 15, 2024 and sell it today you would lose (1.00) from holding Clime Investment Management or give up 2.86% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Dicker Data vs. Clime Investment Management
Performance |
Timeline |
Dicker Data |
Clime Investment Man |
Dicker Data and Clime Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dicker Data and Clime Investment
The main advantage of trading using opposite Dicker Data and Clime Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dicker Data position performs unexpectedly, Clime Investment 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 Clime Investment will offset losses from the drop in Clime Investment's long position.Dicker Data vs. Energy Resources | Dicker Data vs. 88 Energy | Dicker Data vs. Amani Gold | Dicker Data vs. A1 Investments Resources |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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