Correlation Between Dexus Convenience and MetalsGrove Mining
Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and MetalsGrove Mining 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 MetalsGrove Mining 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 MetalsGrove Mining, you can compare the effects of market volatilities on Dexus Convenience and MetalsGrove Mining 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 MetalsGrove Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and MetalsGrove Mining.
Diversification Opportunities for Dexus Convenience and MetalsGrove Mining
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dexus and MetalsGrove is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and MetalsGrove Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetalsGrove Mining 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 MetalsGrove Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetalsGrove Mining has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and MetalsGrove Mining go up and down completely randomly.
Pair Corralation between Dexus Convenience and MetalsGrove Mining
Assuming the 90 days trading horizon Dexus Convenience Retail is expected to generate 0.21 times more return on investment than MetalsGrove Mining. However, Dexus Convenience Retail is 4.86 times less risky than MetalsGrove Mining. It trades about 0.03 of its potential returns per unit of risk. MetalsGrove Mining is currently generating about 0.0 per unit of risk. If you would invest 242.00 in Dexus Convenience Retail on October 14, 2024 and sell it today you would earn a total of 44.00 from holding Dexus Convenience Retail or generate 18.18% 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. MetalsGrove Mining
Performance |
| Timeline |
| Dexus Convenience Retail |
| MetalsGrove Mining |
Dexus Convenience and MetalsGrove Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexus Convenience and MetalsGrove Mining
The main advantage of trading using opposite Dexus Convenience and MetalsGrove Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, MetalsGrove Mining 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 MetalsGrove Mining will offset losses from the drop in MetalsGrove Mining's long position.| Dexus Convenience vs. Southern Cross Media | Dexus Convenience vs. Centrex Metals | Dexus Convenience vs. Queste Communications | Dexus Convenience vs. Iron Road |
| MetalsGrove Mining vs. Technology One | MetalsGrove Mining vs. Dexus Convenience Retail | MetalsGrove Mining vs. Queste Communications | MetalsGrove Mining vs. Aristocrat Leisure |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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