Correlation Between Hotel Property and Dexus Convenience
Can any of the company-specific risk be diversified away by investing in both Hotel Property and Dexus Convenience 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 Hotel Property and Dexus Convenience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Property Investments and Dexus Convenience Retail, you can compare the effects of market volatilities on Hotel Property and Dexus Convenience 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 Hotel Property with a short position of Dexus Convenience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Dexus Convenience.
Diversification Opportunities for Hotel Property and Dexus Convenience
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hotel and Dexus is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Dexus Convenience Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexus Convenience Retail and Hotel 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 Hotel Property Investments are associated (or correlated) with Dexus Convenience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexus Convenience Retail has no effect on the direction of Hotel Property i.e., Hotel Property and Dexus Convenience go up and down completely randomly.
Pair Corralation between Hotel Property and Dexus Convenience
Assuming the 90 days trading horizon Hotel Property Investments is expected to generate 1.14 times more return on investment than Dexus Convenience. However, Hotel Property is 1.14 times more volatile than Dexus Convenience Retail. It trades about 0.09 of its potential returns per unit of risk. Dexus Convenience Retail is currently generating about 0.08 per unit of risk. If you would invest 316.00 in Hotel Property Investments on September 1, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Property Investments vs. Dexus Convenience Retail
Performance |
| Timeline |
| Hotel Property Inves |
| Dexus Convenience Retail |
Hotel Property and Dexus Convenience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Property and Dexus Convenience
The main advantage of trading using opposite Hotel Property and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property position performs unexpectedly, Dexus Convenience 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 Dexus Convenience will offset losses from the drop in Dexus Convenience's long position.| Hotel Property vs. Queste Communications | Hotel Property vs. Super Retail Group | Hotel Property vs. Retail Food Group | Hotel Property vs. Spirit Telecom |
| Dexus Convenience vs. Wt Financial Group | Dexus Convenience vs. Prime Financial Group | Dexus Convenience vs. Pioneer Credit | Dexus Convenience vs. Macquarie Bank Limited |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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