Correlation Between DMC Mining and Dexus Convenience
Can any of the company-specific risk be diversified away by investing in both DMC Mining 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 DMC Mining and Dexus Convenience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DMC Mining and Dexus Convenience Retail, you can compare the effects of market volatilities on DMC Mining 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 DMC Mining with a short position of Dexus Convenience. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMC Mining and Dexus Convenience.
Diversification Opportunities for DMC Mining and Dexus Convenience
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DMC and Dexus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DMC Mining 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 DMC Mining 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 DMC Mining 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 DMC Mining i.e., DMC Mining and Dexus Convenience go up and down completely randomly.
Pair Corralation between DMC Mining and Dexus Convenience
Assuming the 90 days trading horizon DMC Mining is expected to under-perform the Dexus Convenience. In addition to that, DMC Mining is 2.08 times more volatile than Dexus Convenience Retail. It trades about -0.04 of its total potential returns per unit of risk. Dexus Convenience Retail is currently generating about 0.03 per unit of volatility. If you would invest 246.00 in Dexus Convenience Retail on September 4, 2024 and sell it today you would earn a total of 50.00 from holding Dexus Convenience Retail or generate 20.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 92.18% |
| Values | Daily Returns |
DMC Mining vs. Dexus Convenience Retail
Performance |
| Timeline |
| DMC Mining |
| Dexus Convenience Retail |
DMC Mining and Dexus Convenience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DMC Mining and Dexus Convenience
The main advantage of trading using opposite DMC Mining and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMC Mining 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.| DMC Mining vs. Northern Star Resources | DMC Mining vs. Evolution Mining | DMC Mining vs. Bluescope Steel | DMC Mining vs. Sandfire Resources NL |
| Dexus Convenience vs. Scentre Group | Dexus Convenience vs. Vicinity Centres Re | Dexus Convenience vs. Charter Hall Retail | Dexus Convenience vs. Cromwell Property Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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