Correlation Between Dexus Convenience and Lindian Resources
Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and Lindian Resources 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 Lindian Resources 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 Lindian Resources, you can compare the effects of market volatilities on Dexus Convenience and Lindian Resources 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 Lindian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and Lindian Resources.
Diversification Opportunities for Dexus Convenience and Lindian Resources
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dexus and Lindian is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and Lindian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindian Resources 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 Lindian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindian Resources has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and Lindian Resources go up and down completely randomly.
Pair Corralation between Dexus Convenience and Lindian Resources
Assuming the 90 days trading horizon Dexus Convenience Retail is expected to generate 0.15 times more return on investment than Lindian Resources. However, Dexus Convenience Retail is 6.5 times less risky than Lindian Resources. It trades about 0.06 of its potential returns per unit of risk. Lindian Resources is currently generating about 0.0 per unit of risk. If you would invest 285.00 in Dexus Convenience Retail on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Dexus Convenience Retail or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dexus Convenience Retail vs. Lindian Resources
Performance |
| Timeline |
| Dexus Convenience Retail |
| Lindian Resources |
Dexus Convenience and Lindian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexus Convenience and Lindian Resources
The main advantage of trading using opposite Dexus Convenience and Lindian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, Lindian Resources 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 Lindian Resources will offset losses from the drop in Lindian Resources' 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 |
| Lindian Resources vs. Global Health | Lindian Resources vs. Dexus Convenience Retail | Lindian Resources vs. Healthco Healthcare and | Lindian Resources vs. Spirit Telecom |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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