Correlation Between MYFAIR GOLD and DICKER DATA

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

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

Diversification Opportunities for MYFAIR GOLD and DICKER DATA

0.13

Correlation Coefficient

MYFAIR GOLD  DICKER DATA

Average diversification

The 3 months correlation between MYFAIR and DICKER is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding MYFAIR GOLD P and DICKER DATA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKER DATA LTD and MYFAIR GOLD 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 MYFAIR GOLD P are associated (or correlated) with DICKER DATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKER DATA LTD has no effect on the direction of MYFAIR GOLD i.e., MYFAIR GOLD and DICKER DATA go up and down completely randomly.

Pair Corralation between MYFAIR GOLD and DICKER DATA

Assuming the 90 days horizon MYFAIR GOLD P is expected to under-perform the DICKER DATA. In addition to that, MYFAIR GOLD is 2.14 times more volatile than DICKER DATA LTD. It trades about -0.06 of its total potential returns per unit of risk. DICKER DATA LTD is currently generating about -0.09 per unit of volatility. If you would invest  558.00  in DICKER DATA LTD on October 5, 2024 and sell it today you would lose (58.00) from holding DICKER DATA LTD or give up 10.39% of portfolio value over 90 days.

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

MYFAIR GOLD P  vs.  DICKER DATA LTD

MYFAIR GOLD P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MYFAIR GOLD P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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.

Pair Trading with MYFAIR GOLD and DICKER DATA

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

The idea behind MYFAIR GOLD P and DICKER DATA LTD 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.