Correlation Between Dicker Data and Credit Clear

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

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

Diversification Opportunities for Dicker Data and Credit Clear

0.01

Correlation Coefficient

Dicker Data  Credit Clear

Significant diversification

The 3 months correlation between Dicker and Credit is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Dicker Data and Credit Clear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Clear 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 Credit Clear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Clear has no effect on the direction of Dicker Data i.e., Dicker Data and Credit Clear go up and down completely randomly.

Pair Corralation between Dicker Data and Credit Clear

Assuming the 90 days trading horizon Dicker Data is expected to under-perform the Credit Clear. But the stock apears to be less risky and, when comparing its historical volatility, Dicker Data is 2.22 times less risky than Credit Clear. The stock trades about -0.02 of its potential returns per unit of risk. The Credit Clear is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  34.00  in Credit Clear on October 22, 2024 and sell it today you would lose (1.00) from holding Credit Clear or give up 2.94% of portfolio value over 90 days.

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

Dicker Data  vs.  Credit Clear

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.

Credit Clear

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Credit Clear has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Credit Clear 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 Credit Clear

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

The idea behind Dicker Data and Credit Clear 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 Transaction History module to view history of all your transactions and understand their impact on performance.