Correlation Between Dicker Data and Phoslock Environmental

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

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

Diversification Opportunities for Dicker Data and Phoslock Environmental

0.0

Correlation Coefficient

Dicker Data  Phoslock Environmental

Pay attention - limited upside

The 3 months correlation between Dicker and Phoslock is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dicker Data and Phoslock Environmental Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoslock Environmental 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 Phoslock Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoslock Environmental has no effect on the direction of Dicker Data i.e., Dicker Data and Phoslock Environmental go up and down completely randomly.

Pair Corralation between Dicker Data and Phoslock Environmental

Assuming the 90 days trading horizon Dicker Data is expected to under-perform the Phoslock Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Dicker Data is 2.68 times less risky than Phoslock Environmental. The stock trades about 0.0 of its potential returns per unit of risk. The Phoslock Environmental Technologies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  3.40  in Phoslock Environmental Technologies on September 12, 2024 and sell it today you would lose (0.90) from holding Phoslock Environmental Technologies or give up 26.47% of portfolio value over 90 days.

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

Dicker Data  vs.  Phoslock Environmental Technol

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 comparatively stable basic indicators, Dicker Data is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Phoslock Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Dicker Data and Phoslock Environmental

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

The idea behind Dicker Data and Phoslock Environmental Technologies 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.