Correlation Between DICKER DATA and TRADEGATE

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

Diversification Opportunities for DICKER DATA and TRADEGATE

0.06

Correlation Coefficient

DICKER DATA  TRADEGATE

Significant diversification

The 3 months correlation between DICKER and TRADEGATE is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding DICKER DATA LTD and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of DICKER DATA i.e., DICKER DATA and TRADEGATE go up and down completely randomly.

Pair Corralation between DICKER DATA and TRADEGATE

Assuming the 90 days horizon DICKER DATA LTD is expected to generate 2.88 times more return on investment than TRADEGATE. However, DICKER DATA is 2.88 times more volatile than TRADEGATE. It trades about 0.0 of its potential returns per unit of risk. TRADEGATE is currently generating about -0.04 per unit of risk. If you would invest  588.00  in DICKER DATA LTD on October 4, 2024 and sell it today you would lose (88.00) from holding DICKER DATA LTD or give up 14.97% of portfolio value over 90 days.

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

DICKER DATA LTD  vs.  TRADEGATE

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.

TRADEGATE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRADEGATE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, TRADEGATE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with DICKER DATA and TRADEGATE

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

The idea behind DICKER DATA LTD and TRADEGATE 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.