Correlation Between Dexus Convenience and Red Hill
Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and Red Hill 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 Red Hill 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 Red Hill Iron, you can compare the effects of market volatilities on Dexus Convenience and Red Hill 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 Red Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and Red Hill.
Diversification Opportunities for Dexus Convenience and Red Hill
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dexus and Red is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and Red Hill Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Hill Iron 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 Red Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Hill Iron has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and Red Hill go up and down completely randomly.
Pair Corralation between Dexus Convenience and Red Hill
Assuming the 90 days trading horizon Dexus Convenience Retail is expected to under-perform the Red Hill. But the stock apears to be less risky and, when comparing its historical volatility, Dexus Convenience Retail is 1.52 times less risky than Red Hill. The stock trades about -0.04 of its potential returns per unit of risk. The Red Hill Iron is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 391.00 in Red Hill Iron on November 7, 2024 and sell it today you would earn a total of 12.00 from holding Red Hill Iron or generate 3.07% 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. Red Hill Iron
Performance |
| Timeline |
| Dexus Convenience Retail |
| Red Hill Iron |
Dexus Convenience and Red Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexus Convenience and Red Hill
The main advantage of trading using opposite Dexus Convenience and Red Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, Red Hill 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 Red Hill will offset losses from the drop in Red Hill's long position.| Dexus Convenience vs. Actinogen Medical | Dexus Convenience vs. Aurelia Metals | Dexus Convenience vs. AiMedia Technologies | Dexus Convenience vs. ARN Media Limited |
| Red Hill vs. BKI Investment | Red Hill vs. Sandon Capital Investments | Red Hill vs. M3 Mining | Red Hill vs. Aspire Mining |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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