Correlation Between Dexus Convenience and Macquarie Group
Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and Macquarie Group 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 Group 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 Group Ltd, you can compare the effects of market volatilities on Dexus Convenience and Macquarie Group 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 Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and Macquarie Group.
Diversification Opportunities for Dexus Convenience and Macquarie Group
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dexus and Macquarie is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and Macquarie Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group 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 Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and Macquarie Group go up and down completely randomly.
Pair Corralation between Dexus Convenience and Macquarie Group
Assuming the 90 days trading horizon Dexus Convenience is expected to generate 2.43 times less return on investment than Macquarie Group. In addition to that, Dexus Convenience is 2.61 times more volatile than Macquarie Group Ltd. It trades about 0.03 of its total potential returns per unit of risk. Macquarie Group Ltd is currently generating about 0.21 per unit of volatility. If you would invest 10,487 in Macquarie Group Ltd on August 31, 2024 and sell it today you would earn a total of 213.00 from holding Macquarie Group Ltd or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dexus Convenience Retail vs. Macquarie Group Ltd
Performance |
| Timeline |
| Dexus Convenience Retail |
| Macquarie Group |
Dexus Convenience and Macquarie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexus Convenience and Macquarie Group
The main advantage of trading using opposite Dexus Convenience and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, Macquarie Group 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 Group will offset losses from the drop in Macquarie Group's long position.| Dexus Convenience vs. Talisman Mining | Dexus Convenience vs. Pinnacle Investment Management | Dexus Convenience vs. Clime Investment Management | Dexus Convenience vs. Diversified United Investment |
| Macquarie Group vs. Platinum Asset Management | Macquarie Group vs. Dexus Convenience Retail | Macquarie Group vs. Clime Investment Management | Macquarie Group vs. Queste Communications |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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