Correlation Between Dexus Convenience and Mayfield Childcare
Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and Mayfield Childcare 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 Mayfield Childcare 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 Mayfield Childcare, you can compare the effects of market volatilities on Dexus Convenience and Mayfield Childcare 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 Mayfield Childcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and Mayfield Childcare.
Diversification Opportunities for Dexus Convenience and Mayfield Childcare
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dexus and Mayfield is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and Mayfield Childcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayfield Childcare 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 Mayfield Childcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayfield Childcare has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and Mayfield Childcare go up and down completely randomly.
Pair Corralation between Dexus Convenience and Mayfield Childcare
Assuming the 90 days trading horizon Dexus Convenience Retail is expected to under-perform the Mayfield Childcare. But the stock apears to be less risky and, when comparing its historical volatility, Dexus Convenience Retail is 1.39 times less risky than Mayfield Childcare. The stock trades about -0.02 of its potential returns per unit of risk. The Mayfield Childcare is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 53.00 in Mayfield Childcare on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Mayfield Childcare or generate 1.89% 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. Mayfield Childcare
Performance |
| Timeline |
| Dexus Convenience Retail |
| Mayfield Childcare |
Dexus Convenience and Mayfield Childcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexus Convenience and Mayfield Childcare
The main advantage of trading using opposite Dexus Convenience and Mayfield Childcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, Mayfield Childcare 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 Mayfield Childcare will offset losses from the drop in Mayfield Childcare's long position.| Dexus Convenience vs. Wt Financial Group | Dexus Convenience vs. Prime Financial Group | Dexus Convenience vs. Pioneer Credit | Dexus Convenience vs. Macquarie Bank Limited |
| Mayfield Childcare vs. Iron Road | Mayfield Childcare vs. Homeco Daily Needs | Mayfield Childcare vs. Premier Investments | Mayfield Childcare vs. Flagship Investments |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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