Correlation Between MotorCycle Holdings and Dicker Data

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Can any of the company-specific risk be diversified away by investing in both MotorCycle Holdings 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 MotorCycle Holdings and Dicker Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MotorCycle Holdings and Dicker Data, you can compare the effects of market volatilities on MotorCycle Holdings 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 MotorCycle Holdings with a short position of Dicker Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of MotorCycle Holdings and Dicker Data.

Diversification Opportunities for MotorCycle Holdings and Dicker Data

MotorCycleDickerDiversified AwayMotorCycleDickerDiversified Away100%
-0.45
  Correlation Coefficient

Very good diversification

The 3 months correlation between MotorCycle and Dicker is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding MotorCycle Holdings and Dicker Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicker Data and MotorCycle Holdings 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 MotorCycle Holdings 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 MotorCycle Holdings i.e., MotorCycle Holdings and Dicker Data go up and down completely randomly.

Pair Corralation between MotorCycle Holdings and Dicker Data

Assuming the 90 days trading horizon MotorCycle Holdings is expected to generate 1.93 times more return on investment than Dicker Data. However, MotorCycle Holdings is 1.93 times more volatile than Dicker Data. It trades about 0.26 of its potential returns per unit of risk. Dicker Data is currently generating about 0.02 per unit of risk. If you would invest  159.00  in MotorCycle Holdings on September 27, 2024 and sell it today you would earn a total of  30.00  from holding MotorCycle Holdings or generate 18.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

MotorCycle Holdings  vs.  Dicker Data

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -505101520
JavaScript chart by amCharts 3.21.15MTO DDR
       Timeline  
MotorCycle Holdings 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in MotorCycle Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MotorCycle Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15NovDecDec1.61.651.71.751.81.851.91.95
Dicker Data 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15NovDecDec8.28.48.68.899.29.49.6

MotorCycle Holdings and Dicker Data Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.03-5.26-3.5-1.73-0.02941.813.685.557.439.3 0.050.100.150.20
JavaScript chart by amCharts 3.21.15MTO DDR
       Returns  

Pair Trading with MotorCycle Holdings and Dicker Data

The main advantage of trading using opposite MotorCycle Holdings and Dicker Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MotorCycle Holdings 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 MotorCycle Holdings 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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