Correlation Between Dexus Convenience and Macquarie Technology
Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and Macquarie Technology 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 Macquarie Technology 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 Macquarie Technology Group, you can compare the effects of market volatilities on Dexus Convenience and Macquarie Technology 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 Macquarie Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and Macquarie Technology.
Diversification Opportunities for Dexus Convenience and Macquarie Technology
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dexus and Macquarie is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and Macquarie Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Technology 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 Macquarie Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Technology has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and Macquarie Technology go up and down completely randomly.
Pair Corralation between Dexus Convenience and Macquarie Technology
Assuming the 90 days trading horizon Dexus Convenience is expected to generate 2.33 times less return on investment than Macquarie Technology. But when comparing it to its historical volatility, Dexus Convenience Retail is 1.29 times less risky than Macquarie Technology. It trades about 0.03 of its potential returns per unit of risk. Macquarie Technology Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,810 in Macquarie Technology Group on October 30, 2024 and sell it today you would earn a total of 2,711 from holding Macquarie Technology Group or generate 46.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dexus Convenience Retail vs. Macquarie Technology Group
Performance |
| Timeline |
| Dexus Convenience Retail |
| Macquarie Technology |
Dexus Convenience and Macquarie Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexus Convenience and Macquarie Technology
The main advantage of trading using opposite Dexus Convenience and Macquarie Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, Macquarie Technology 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 Macquarie Technology will offset losses from the drop in Macquarie Technology's long position.| Dexus Convenience vs. Aurelia Metals | Dexus Convenience vs. Meeka Metals Limited | Dexus Convenience vs. Lykos Metals | Dexus Convenience vs. FireFly Metals |
| Macquarie Technology vs. Auswide Bank | Macquarie Technology vs. EROAD | Macquarie Technology vs. Qbe Insurance Group | Macquarie Technology vs. Group 6 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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