Correlation Between Dexus Convenience and Charter Hall
Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and Charter Hall 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 Charter Hall 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 Charter Hall Retail, you can compare the effects of market volatilities on Dexus Convenience and Charter Hall 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 Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and Charter Hall.
Diversification Opportunities for Dexus Convenience and Charter Hall
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dexus and Charter is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and Charter Hall Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Hall Retail 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 Charter Hall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Hall Retail has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and Charter Hall go up and down completely randomly.
Pair Corralation between Dexus Convenience and Charter Hall
Assuming the 90 days trading horizon Dexus Convenience Retail is expected to generate 1.07 times more return on investment than Charter Hall. However, Dexus Convenience is 1.07 times more volatile than Charter Hall Retail. It trades about 0.03 of its potential returns per unit of risk. Charter Hall Retail is currently generating about 0.0 per unit of risk. If you would invest 250.00 in Dexus Convenience Retail on August 26, 2024 and sell it today you would earn a total of 43.00 from holding Dexus Convenience Retail or generate 17.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dexus Convenience Retail vs. Charter Hall Retail
Performance |
| Timeline |
| Dexus Convenience Retail |
| Charter Hall Retail |
Dexus Convenience and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexus Convenience and Charter Hall
The main advantage of trading using opposite Dexus Convenience and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, Charter Hall 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 Charter Hall will offset losses from the drop in Charter Hall's long position.| Dexus Convenience vs. Scentre Group | Dexus Convenience vs. Vicinity Centres Re | Dexus Convenience vs. Cromwell Property Group | Dexus Convenience vs. GDI Property Group |
| Charter Hall vs. Scentre Group | Charter Hall vs. Vicinity Centres Re | Charter Hall vs. Cromwell Property Group | Charter Hall vs. GDI 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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