Correlation Between Microequities Asset and Dexus Convenience
Can any of the company-specific risk be diversified away by investing in both Microequities 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 Microequities 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 Microequities Asset Management and Dexus Convenience Retail, you can compare the effects of market volatilities on Microequities 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 Microequities Asset with a short position of Dexus Convenience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microequities Asset and Dexus Convenience.
Diversification Opportunities for Microequities Asset and Dexus Convenience
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Microequities and Dexus is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Microequities 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 Microequities 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 Microequities 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 Microequities Asset i.e., Microequities Asset and Dexus Convenience go up and down completely randomly.
Pair Corralation between Microequities Asset and Dexus Convenience
Assuming the 90 days trading horizon Microequities Asset Management is expected to generate 1.48 times more return on investment than Dexus Convenience. However, Microequities Asset is 1.48 times more volatile than Dexus Convenience Retail. It trades about 0.18 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 51.00 in Microequities Asset Management on October 30, 2024 and sell it today you would earn a total of 7.00 from holding Microequities Asset Management or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microequities Asset Management vs. Dexus Convenience Retail
Performance |
| Timeline |
| Microequities Asset |
| Dexus Convenience Retail |
Microequities Asset and Dexus Convenience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microequities Asset and Dexus Convenience
The main advantage of trading using opposite Microequities Asset and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microequities 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.| Microequities Asset vs. Magellan Financial Group | Microequities Asset vs. Sequoia Financial Group | Microequities Asset vs. Finexia Financial Group | Microequities Asset vs. BSP Financial Group |
| Dexus Convenience vs. Aurelia Metals | Dexus Convenience vs. Meeka Metals Limited | Dexus Convenience vs. Lykos Metals | Dexus Convenience vs. FireFly Metals |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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