Correlation Between Cromwell Property and Dexus Property
Can any of the company-specific risk be diversified away by investing in both Cromwell Property and Dexus Property 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 Cromwell Property and Dexus Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cromwell Property Group and Dexus Property Group, you can compare the effects of market volatilities on Cromwell Property and Dexus Property 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 Cromwell Property with a short position of Dexus Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cromwell Property and Dexus Property.
Diversification Opportunities for Cromwell Property and Dexus Property
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cromwell and Dexus is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cromwell Property Group and Dexus Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexus Property Group and Cromwell Property 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 Cromwell Property Group are associated (or correlated) with Dexus Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexus Property Group has no effect on the direction of Cromwell Property i.e., Cromwell Property and Dexus Property go up and down completely randomly.
Pair Corralation between Cromwell Property and Dexus Property
Assuming the 90 days trading horizon Cromwell Property Group is expected to under-perform the Dexus Property. In addition to that, Cromwell Property is 1.99 times more volatile than Dexus Property Group. It trades about -0.21 of its total potential returns per unit of risk. Dexus Property Group is currently generating about -0.09 per unit of volatility. If you would invest 715.00 in Dexus Property Group on August 28, 2024 and sell it today you would lose (15.00) from holding Dexus Property Group or give up 2.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cromwell Property Group vs. Dexus Property Group
Performance |
| Timeline |
| Cromwell Property |
| Dexus Property Group |
Cromwell Property and Dexus Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cromwell Property and Dexus Property
The main advantage of trading using opposite Cromwell Property and Dexus Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cromwell Property position performs unexpectedly, Dexus Property 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 Property will offset losses from the drop in Dexus Property's long position.| Cromwell Property vs. Auctus Alternative Investments | Cromwell Property vs. Hudson Investment Group | Cromwell Property vs. Pinnacle Investment Management | Cromwell Property vs. Platinum 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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