Correlation Between Dexus Convenience and Patriot Battery
Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and Patriot Battery 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 Patriot Battery 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 Patriot Battery Metals, you can compare the effects of market volatilities on Dexus Convenience and Patriot Battery 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 Patriot Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and Patriot Battery.
Diversification Opportunities for Dexus Convenience and Patriot Battery
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dexus and Patriot is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and Patriot Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patriot Battery Metals 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 Patriot Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patriot Battery Metals has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and Patriot Battery go up and down completely randomly.
Pair Corralation between Dexus Convenience and Patriot Battery
Assuming the 90 days trading horizon Dexus Convenience Retail is expected to generate 0.15 times more return on investment than Patriot Battery. However, Dexus Convenience Retail is 6.61 times less risky than Patriot Battery. It trades about 0.06 of its potential returns per unit of risk. Patriot Battery Metals is currently generating about -0.03 per unit of risk. If you would invest 250.00 in Dexus Convenience Retail on August 29, 2024 and sell it today you would earn a total of 40.00 from holding Dexus Convenience Retail or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.53% |
| Values | Daily Returns |
Dexus Convenience Retail vs. Patriot Battery Metals
Performance |
| Timeline |
| Dexus Convenience Retail |
| Patriot Battery Metals |
Dexus Convenience and Patriot Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexus Convenience and Patriot Battery
The main advantage of trading using opposite Dexus Convenience and Patriot Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, Patriot Battery 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 Patriot Battery will offset losses from the drop in Patriot Battery's long position.| Dexus Convenience vs. Charter Hall Retail | Dexus Convenience vs. Australian Unity Office | Dexus Convenience vs. Champion Iron | Dexus Convenience vs. Ridley |
| Patriot Battery vs. Queste Communications | Patriot Battery vs. Regis Healthcare | Patriot Battery vs. Austco Healthcare | Patriot Battery vs. Apiam Animal Health |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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