Correlation Between Dexus Convenience and Aeris Environmental
Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and Aeris Environmental 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 Aeris Environmental 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 Aeris Environmental, you can compare the effects of market volatilities on Dexus Convenience and Aeris Environmental 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 Aeris Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and Aeris Environmental.
Diversification Opportunities for Dexus Convenience and Aeris Environmental
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dexus and Aeris is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and Aeris Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeris Environmental 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 Aeris Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeris Environmental has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and Aeris Environmental go up and down completely randomly.
Pair Corralation between Dexus Convenience and Aeris Environmental
Assuming the 90 days trading horizon Dexus Convenience is expected to generate 4.65 times less return on investment than Aeris Environmental. But when comparing it to its historical volatility, Dexus Convenience Retail is 3.05 times less risky than Aeris Environmental. It trades about 0.06 of its potential returns per unit of risk. Aeris Environmental is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Aeris Environmental on September 20, 2024 and sell it today you would earn a total of 4.50 from holding Aeris Environmental or generate 112.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dexus Convenience Retail vs. Aeris Environmental
Performance |
| Timeline |
| Dexus Convenience Retail |
| Aeris Environmental |
Dexus Convenience and Aeris Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexus Convenience and Aeris Environmental
The main advantage of trading using opposite Dexus Convenience and Aeris Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, Aeris Environmental 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 Aeris Environmental will offset losses from the drop in Aeris Environmental's long position.| Dexus Convenience vs. Air New Zealand | Dexus Convenience vs. EROAD | Dexus Convenience vs. Richmond Vanadium Technology | Dexus Convenience vs. Aussie Broadband |
| Aeris Environmental vs. Iron Road | Aeris Environmental vs. Duxton Broadacre Farms | Aeris Environmental vs. Dexus Convenience Retail | Aeris Environmental vs. Farm Pride Foods |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |