Correlation Between Dexus Convenience and Global Masters
Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and Global Masters 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 Global Masters 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 Global Masters, you can compare the effects of market volatilities on Dexus Convenience and Global Masters 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 Global Masters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and Global Masters.
Diversification Opportunities for Dexus Convenience and Global Masters
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dexus and Global is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and Global Masters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Masters 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 Global Masters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Masters has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and Global Masters go up and down completely randomly.
Pair Corralation between Dexus Convenience and Global Masters
Assuming the 90 days trading horizon Dexus Convenience Retail is expected to under-perform the Global Masters. In addition to that, Dexus Convenience is 1.03 times more volatile than Global Masters. It trades about -0.05 of its total potential returns per unit of risk. Global Masters is currently generating about 0.2 per unit of volatility. If you would invest 345.00 in Global Masters on September 3, 2024 and sell it today you would earn a total of 16.00 from holding Global Masters or generate 4.64% 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. Global Masters
Performance |
| Timeline |
| Dexus Convenience Retail |
| Global Masters |
Dexus Convenience and Global Masters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexus Convenience and Global Masters
The main advantage of trading using opposite Dexus Convenience and Global Masters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, Global Masters 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 Global Masters will offset losses from the drop in Global Masters' long position.| Dexus Convenience vs. Seven West Media | Dexus Convenience vs. Carlton Investments | Dexus Convenience vs. Clime Investment Management | Dexus Convenience vs. Centaurus Metals |
| Global Masters vs. Dexus Convenience Retail | Global Masters vs. Sky Metals | Global Masters vs. Hutchison Telecommunications | Global Masters vs. Stelar Metals |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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