Correlation Between BTC Health and Dexus Convenience
Can any of the company-specific risk be diversified away by investing in both BTC Health and Dexus Convenience 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 BTC Health and Dexus Convenience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTC Health Limited and Dexus Convenience Retail, you can compare the effects of market volatilities on BTC Health and Dexus Convenience 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 BTC Health with a short position of Dexus Convenience. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Health and Dexus Convenience.
Diversification Opportunities for BTC Health and Dexus Convenience
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BTC and Dexus is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and Dexus Convenience Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexus Convenience Retail and BTC Health 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 BTC Health Limited are associated (or correlated) with Dexus Convenience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexus Convenience Retail has no effect on the direction of BTC Health i.e., BTC Health and Dexus Convenience go up and down completely randomly.
Pair Corralation between BTC Health and Dexus Convenience
Assuming the 90 days trading horizon BTC Health Limited is expected to generate 3.58 times more return on investment than Dexus Convenience. However, BTC Health is 3.58 times more volatile than Dexus Convenience Retail. It trades about 0.14 of its potential returns per unit of risk. Dexus Convenience Retail is currently generating about 0.17 per unit of risk. If you would invest 6.00 in BTC Health Limited on November 28, 2024 and sell it today you would earn a total of 0.60 from holding BTC Health Limited or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTC Health Limited vs. Dexus Convenience Retail
Performance |
| Timeline |
| BTC Health Limited |
| Dexus Convenience Retail |
BTC Health and Dexus Convenience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTC Health and Dexus Convenience
The main advantage of trading using opposite BTC Health and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Health position performs unexpectedly, Dexus Convenience 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 Dexus Convenience will offset losses from the drop in Dexus Convenience's long position.| BTC Health vs. Energy Technologies Limited | BTC Health vs. Unico Silver | BTC Health vs. Truscott Mining Corp | BTC Health vs. Readytech Holdings |
| Dexus Convenience vs. Cleanaway Waste Management | Dexus Convenience vs. Sports Entertainment Group | Dexus Convenience vs. ARN Media Limited | Dexus Convenience vs. Seven West Media |
Check out your portfolio center.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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