Correlation Between Dexus Property and Hotel Property
Can any of the company-specific risk be diversified away by investing in both Dexus Property and Hotel Property 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 Property and Hotel Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dexus Property Group and Hotel Property Investments, you can compare the effects of market volatilities on Dexus Property and Hotel Property 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 Property with a short position of Hotel Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Property and Hotel Property.
Diversification Opportunities for Dexus Property and Hotel Property
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dexus and Hotel is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Property Group and Hotel Property Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Property Inves and Dexus Property 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 Property Group are associated (or correlated) with Hotel Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Property Inves has no effect on the direction of Dexus Property i.e., Dexus Property and Hotel Property go up and down completely randomly.
Pair Corralation between Dexus Property and Hotel Property
Assuming the 90 days trading horizon Dexus Property is expected to generate 1.47 times less return on investment than Hotel Property. In addition to that, Dexus Property is 1.17 times more volatile than Hotel Property Investments. It trades about 0.05 of its total potential returns per unit of risk. Hotel Property Investments is currently generating about 0.09 per unit of volatility. If you would invest 316.00 in Hotel Property Investments on August 31, 2024 and sell it today you would earn a total of 54.00 from holding Hotel Property Investments or generate 17.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dexus Property Group vs. Hotel Property Investments
Performance |
| Timeline |
| Dexus Property Group |
| Hotel Property Inves |
Dexus Property and Hotel Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexus Property and Hotel Property
The main advantage of trading using opposite Dexus Property and Hotel Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Property position performs unexpectedly, Hotel Property 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 Hotel Property will offset losses from the drop in Hotel Property's long position.| Dexus Property vs. Scentre Group | Dexus Property vs. Charter Hall Retail | Dexus Property vs. Ecofibre | Dexus Property vs. iShares Global Healthcare |
| Hotel Property vs. Scentre Group | Hotel Property vs. Charter Hall Retail | Hotel Property vs. Ecofibre | Hotel Property vs. iShares Global Healthcare |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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