Correlation Between Dicker Data and EROAD

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

By analyzing existing cross correlation between Dicker Data and EROAD, you can compare the effects of market volatilities on Dicker Data and EROAD 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 EROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dicker Data and EROAD.

Diversification Opportunities for Dicker Data and EROAD

0.49

Correlation Coefficient

Dicker Data  EROAD

Very weak diversification

The 3 months correlation between Dicker and EROAD is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dicker Data and EROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EROAD 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 EROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EROAD has no effect on the direction of Dicker Data i.e., Dicker Data and EROAD go up and down completely randomly.

Pair Corralation between Dicker Data and EROAD

Assuming the 90 days trading horizon Dicker Data is expected to generate 0.4 times more return on investment than EROAD. However, Dicker Data is 2.5 times less risky than EROAD. It trades about -0.1 of its potential returns per unit of risk. EROAD is currently generating about -0.11 per unit of risk. If you would invest  912.00  in Dicker Data on August 31, 2024 and sell it today you would lose (79.00) from holding Dicker Data or give up 8.66% of portfolio value over 90 days.

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

Dicker Data  vs.  EROAD

Dicker Data

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dicker Data 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.

EROAD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EROAD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Dicker Data and EROAD

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

The idea behind Dicker Data and EROAD 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.