Correlation Between Macquarie Technology and Dexus Convenience
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology 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 Macquarie Technology and Dexus Convenience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Technology Group and Dexus Convenience Retail, you can compare the effects of market volatilities on Macquarie Technology 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 Macquarie Technology with a short position of Dexus Convenience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Dexus Convenience.
Diversification Opportunities for Macquarie Technology and Dexus Convenience
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Macquarie and Dexus is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group 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 Macquarie Technology 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 Macquarie Technology Group 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 Macquarie Technology i.e., Macquarie Technology and Dexus Convenience go up and down completely randomly.
Pair Corralation between Macquarie Technology and Dexus Convenience
Assuming the 90 days trading horizon Macquarie Technology Group is expected to generate 1.38 times more return on investment than Dexus Convenience. However, Macquarie Technology is 1.38 times more volatile than Dexus Convenience Retail. It trades about 0.06 of its potential returns per unit of risk. Dexus Convenience Retail is currently generating about 0.06 per unit of risk. If you would invest 6,587 in Macquarie Technology Group on November 5, 2024 and sell it today you would earn a total of 1,881 from holding Macquarie Technology Group or generate 28.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Technology Group vs. Dexus Convenience Retail
Performance |
| Timeline |
| Macquarie Technology |
| Dexus Convenience Retail |
Macquarie Technology and Dexus Convenience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Technology and Dexus Convenience
The main advantage of trading using opposite Macquarie Technology and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology 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.| Macquarie Technology vs. Aspire Mining | Macquarie Technology vs. Bell Financial Group | Macquarie Technology vs. Qbe Insurance Group | Macquarie Technology vs. Hutchison Telecommunications |
| Dexus Convenience vs. Champion Iron | Dexus Convenience vs. Ramsay Health Care | Dexus Convenience vs. Ras Technology Holdings | Dexus Convenience vs. Pearl Gull Iron |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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