Correlation Between K2 Asset and Dexus Convenience
Can any of the company-specific risk be diversified away by investing in both K2 Asset 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 K2 Asset and Dexus Convenience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K2 Asset Management and Dexus Convenience Retail, you can compare the effects of market volatilities on K2 Asset 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 K2 Asset with a short position of Dexus Convenience. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2 Asset and Dexus Convenience.
Diversification Opportunities for K2 Asset and Dexus Convenience
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KAM and Dexus is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding K2 Asset Management 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 K2 Asset 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 K2 Asset Management 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 K2 Asset i.e., K2 Asset and Dexus Convenience go up and down completely randomly.
Pair Corralation between K2 Asset and Dexus Convenience
Assuming the 90 days trading horizon K2 Asset Management is expected to generate 3.67 times more return on investment than Dexus Convenience. However, K2 Asset is 3.67 times more volatile than Dexus Convenience Retail. It trades about 0.05 of its potential returns per unit of risk. Dexus Convenience Retail is currently generating about 0.03 per unit of risk. If you would invest 3.97 in K2 Asset Management on October 16, 2024 and sell it today you would earn a total of 3.13 from holding K2 Asset Management or generate 78.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
K2 Asset Management vs. Dexus Convenience Retail
Performance |
| Timeline |
| K2 Asset Management |
| Dexus Convenience Retail |
K2 Asset and Dexus Convenience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2 Asset and Dexus Convenience
The main advantage of trading using opposite K2 Asset and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2 Asset 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.| K2 Asset vs. Clime Investment Management | K2 Asset vs. A1 Investments Resources | K2 Asset vs. Insurance Australia Group | K2 Asset vs. National Australia Bank |
| Dexus Convenience vs. Hammer Metals | Dexus Convenience vs. Carlton Investments | Dexus Convenience vs. Microequities Asset Management | Dexus Convenience vs. K2 Asset Management |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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