Correlation Between Macquarie Technology and Dicker Data

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

By analyzing existing cross correlation between Macquarie Technology Group and Dicker Data, you can compare the effects of market volatilities on Macquarie Technology 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 Macquarie Technology with a short position of Dicker Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Dicker Data.

Diversification Opportunities for Macquarie Technology and Dicker Data

-0.2

Correlation Coefficient

Macquarie Technology  Dicker Data

Good diversification

The 3 months correlation between Macquarie and Dicker is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Dicker Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicker Data and Macquarie Technology 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 Macquarie Technology Group 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 has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Dicker Data go up and down completely randomly.

Pair Corralation between Macquarie Technology and Dicker Data

Assuming the 90 days trading horizon Macquarie Technology Group is expected to under-perform the Dicker Data. But the stock apears to be less risky and, when comparing its historical volatility, Macquarie Technology Group is 1.13 times less risky than Dicker Data. The stock trades about -0.11 of its potential returns per unit of risk. The Dicker Data is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  837.00  in Dicker Data on September 23, 2024 and sell it today you would lose (12.00) from holding Dicker Data or give up 1.43% of portfolio value over 90 days.

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

Macquarie Technology Group  vs.  Dicker Data

Macquarie Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Macquarie Technology Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Macquarie Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Macquarie Technology and Dicker Data

The main advantage of trading using opposite Macquarie Technology and Dicker Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology 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 Macquarie Technology Group and Dicker Data 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.