Correlation Between Dexus Convenience and Constellation Technologies
Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and Constellation Technologies 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 Constellation Technologies 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 Constellation Technologies, you can compare the effects of market volatilities on Dexus Convenience and Constellation Technologies 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 Constellation Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and Constellation Technologies.
Diversification Opportunities for Dexus Convenience and Constellation Technologies
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dexus and Constellation is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and Constellation Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Technologies 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 Constellation Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Technologies has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and Constellation Technologies go up and down completely randomly.
Pair Corralation between Dexus Convenience and Constellation Technologies
Assuming the 90 days trading horizon Dexus Convenience is expected to generate 14.1 times less return on investment than Constellation Technologies. But when comparing it to its historical volatility, Dexus Convenience Retail is 9.31 times less risky than Constellation Technologies. It trades about 0.03 of its potential returns per unit of risk. Constellation Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.20 in Constellation Technologies on October 26, 2024 and sell it today you would earn a total of 0.00 from holding Constellation Technologies or generate 0.0% 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. Constellation Technologies
Performance |
| Timeline |
| Dexus Convenience Retail |
| Constellation Technologies |
Dexus Convenience and Constellation Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexus Convenience and Constellation Technologies
The main advantage of trading using opposite Dexus Convenience and Constellation Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, Constellation Technologies 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 Constellation Technologies will offset losses from the drop in Constellation Technologies' long position.| Dexus Convenience vs. Flagship Investments | Dexus Convenience vs. Truscott Mining Corp | Dexus Convenience vs. Pinnacle Investment Management | Dexus Convenience vs. A1 Investments Resources |
| Constellation Technologies vs. Aneka Tambang Tbk | Constellation Technologies vs. Macquarie Group | Constellation Technologies vs. Macquarie Group Ltd | Constellation Technologies vs. Challenger |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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