Correlation Between Dexus Convenience and ARN Media
Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and ARN Media 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 Dexus Convenience and ARN Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dexus Convenience Retail and ARN Media Limited, you can compare the effects of market volatilities on Dexus Convenience and ARN Media 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 Dexus Convenience with a short position of ARN Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and ARN Media.
Diversification Opportunities for Dexus Convenience and ARN Media
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dexus and ARN is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and ARN Media Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARN Media Limited and Dexus Convenience 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 Dexus Convenience Retail are associated (or correlated) with ARN Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARN Media Limited has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and ARN Media go up and down completely randomly.
Pair Corralation between Dexus Convenience and ARN Media
Assuming the 90 days trading horizon Dexus Convenience Retail is expected to generate 0.5 times more return on investment than ARN Media. However, Dexus Convenience Retail is 1.99 times less risky than ARN Media. It trades about 0.03 of its potential returns per unit of risk. ARN Media Limited is currently generating about -0.02 per unit of risk. If you would invest 241.00 in Dexus Convenience Retail on November 1, 2024 and sell it today you would earn a total of 44.00 from holding Dexus Convenience Retail or generate 18.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dexus Convenience Retail vs. ARN Media Limited
Performance |
| Timeline |
| Dexus Convenience Retail |
| ARN Media Limited |
Dexus Convenience and ARN Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexus Convenience and ARN Media
The main advantage of trading using opposite Dexus Convenience and ARN Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, ARN Media 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 ARN Media will offset losses from the drop in ARN Media's long position.| Dexus Convenience vs. DY6 Metals | Dexus Convenience vs. Pinnacle Investment Management | Dexus Convenience vs. Steamships Trading | Dexus Convenience vs. K2 Asset Management |
| ARN Media vs. Readytech Holdings | ARN Media vs. Genetic Technologies | ARN Media vs. Red Hill Iron | ARN Media vs. Bluescope Steel |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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