Correlation Between DICKER DATA and DALATA HOTEL

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

Diversification Opportunities for DICKER DATA and DALATA HOTEL

0.21

Correlation Coefficient

DICKER DATA  DALATA HOTEL

Modest diversification

The 3 months correlation between DICKER and DALATA is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding DICKER DATA LTD and DALATA HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DALATA HOTEL 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 DALATA HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DALATA HOTEL has no effect on the direction of DICKER DATA i.e., DICKER DATA and DALATA HOTEL go up and down completely randomly.

Pair Corralation between DICKER DATA and DALATA HOTEL

Assuming the 90 days horizon DICKER DATA LTD is expected to under-perform the DALATA HOTEL. In addition to that, DICKER DATA is 1.67 times more volatile than DALATA HOTEL. It trades about 0.0 of its total potential returns per unit of risk. DALATA HOTEL is currently generating about 0.09 per unit of volatility. If you would invest  418.00  in DALATA HOTEL on December 2, 2024 and sell it today you would earn a total of  37.00  from holding DALATA HOTEL or generate 8.85% return on investment over 90 days.

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

DICKER DATA LTD  vs.  DALATA HOTEL

DICKER DATA LTD

Risk-Adjusted Performance

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 nearly stable basic indicators, DICKER DATA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

DALATA HOTEL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DALATA HOTEL are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, DALATA HOTEL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with DICKER DATA and DALATA HOTEL

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

The idea behind DICKER DATA LTD and DALATA HOTEL 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.