Correlation Between Dexus Convenience and Resource Base
Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and Resource Base 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 Resource Base 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 Resource Base, you can compare the effects of market volatilities on Dexus Convenience and Resource Base 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 Resource Base. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and Resource Base.
Diversification Opportunities for Dexus Convenience and Resource Base
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dexus and Resource is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and Resource Base in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resource Base 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 Resource Base. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resource Base has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and Resource Base go up and down completely randomly.
Pair Corralation between Dexus Convenience and Resource Base
Assuming the 90 days trading horizon Dexus Convenience Retail is expected to generate 0.24 times more return on investment than Resource Base. However, Dexus Convenience Retail is 4.21 times less risky than Resource Base. It trades about 0.03 of its potential returns per unit of risk. Resource Base is currently generating about 0.0 per unit of risk. If you would invest 252.00 in Dexus Convenience Retail on September 3, 2024 and sell it today you would earn a total of 43.00 from holding Dexus Convenience Retail or generate 17.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dexus Convenience Retail vs. Resource Base
Performance |
| Timeline |
| Dexus Convenience Retail |
| Resource Base |
Dexus Convenience and Resource Base Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexus Convenience and Resource Base
The main advantage of trading using opposite Dexus Convenience and Resource Base positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, Resource Base 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 Resource Base will offset losses from the drop in Resource Base's long position.| Dexus Convenience vs. Seven West Media | Dexus Convenience vs. Carlton Investments | Dexus Convenience vs. Clime Investment Management | Dexus Convenience vs. Centaurus Metals |
| Resource Base vs. Northern Star Resources | Resource Base vs. Evolution Mining | Resource Base vs. Bluescope Steel | Resource Base vs. Aneka Tambang Tbk |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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