Correlation Between Champion Iron and Dexus Convenience
Can any of the company-specific risk be diversified away by investing in both Champion Iron 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 Champion Iron and Dexus Convenience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Iron and Dexus Convenience Retail, you can compare the effects of market volatilities on Champion Iron 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 Champion Iron with a short position of Dexus Convenience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and Dexus Convenience.
Diversification Opportunities for Champion Iron and Dexus Convenience
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Champion and Dexus is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron 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 Champion Iron 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 Champion Iron 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 Champion Iron i.e., Champion Iron and Dexus Convenience go up and down completely randomly.
Pair Corralation between Champion Iron and Dexus Convenience
Assuming the 90 days trading horizon Champion Iron is expected to generate 2.2 times more return on investment than Dexus Convenience. However, Champion Iron is 2.2 times more volatile than Dexus Convenience Retail. It trades about 0.15 of its potential returns per unit of risk. Dexus Convenience Retail is currently generating about 0.21 per unit of risk. If you would invest 553.00 in Champion Iron on November 27, 2024 and sell it today you would earn a total of 36.00 from holding Champion Iron or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Iron vs. Dexus Convenience Retail
Performance |
| Timeline |
| Champion Iron |
| Dexus Convenience Retail |
Champion Iron and Dexus Convenience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Iron and Dexus Convenience
The main advantage of trading using opposite Champion Iron and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Iron 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.| Champion Iron vs. Clime Investment Management | Champion Iron vs. Advanced Braking Technology | Champion Iron vs. Pinnacle Investment Management | Champion Iron vs. Microequities Asset Management |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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