Correlation Between Hotel Property and Dexus Property
Can any of the company-specific risk be diversified away by investing in both Hotel Property and Dexus 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 Hotel Property and Dexus Property 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 Property Group, you can compare the effects of market volatilities on Hotel Property and Dexus 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 Hotel Property with a short position of Dexus Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Dexus Property.
Diversification Opportunities for Hotel Property and Dexus Property
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hotel and Dexus is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Dexus Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexus Property Group 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 Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexus Property Group has no effect on the direction of Hotel Property i.e., Hotel Property and Dexus Property go up and down completely randomly.
Pair Corralation between Hotel Property and Dexus Property
Assuming the 90 days trading horizon Hotel Property Investments is expected to generate 0.93 times more return on investment than Dexus Property. However, Hotel Property Investments is 1.07 times less risky than Dexus Property. It trades about 0.04 of its potential returns per unit of risk. Dexus Property Group is currently generating about 0.0 per unit of risk. If you would invest 303.00 in Hotel Property Investments on August 31, 2024 and sell it today you would earn a total of 67.00 from holding Hotel Property Investments or generate 22.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Property Investments vs. Dexus Property Group
Performance |
| Timeline |
| Hotel Property Inves |
| Dexus Property Group |
Hotel Property and Dexus Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Property and Dexus Property
The main advantage of trading using opposite Hotel Property and Dexus Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property position performs unexpectedly, Dexus 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 Dexus Property will offset losses from the drop in Dexus Property's long position.| Hotel Property vs. Scentre Group | Hotel Property vs. Charter Hall Retail | Hotel Property vs. Ecofibre | Hotel Property vs. iShares Global Healthcare |
| Dexus Property vs. Scentre Group | Dexus Property vs. Charter Hall Retail | Dexus Property vs. Ecofibre | Dexus 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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