Correlation Between Macquarie Bank and Dexus Convenience
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank 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 Bank 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 Bank Limited and Dexus Convenience Retail, you can compare the effects of market volatilities on Macquarie Bank 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 Bank with a short position of Dexus Convenience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and Dexus Convenience.
Diversification Opportunities for Macquarie Bank and Dexus Convenience
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Macquarie and Dexus is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited 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 Bank 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 Bank Limited 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 Bank i.e., Macquarie Bank and Dexus Convenience go up and down completely randomly.
Pair Corralation between Macquarie Bank and Dexus Convenience
Assuming the 90 days trading horizon Macquarie Bank is expected to generate 3.23 times less return on investment than Dexus Convenience. But when comparing it to its historical volatility, Macquarie Bank Limited is 2.55 times less risky than Dexus Convenience. It trades about 0.07 of its potential returns per unit of risk. Dexus Convenience Retail is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 256.00 in Dexus Convenience Retail on September 3, 2024 and sell it today you would earn a total of 39.00 from holding Dexus Convenience Retail or generate 15.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Bank Limited vs. Dexus Convenience Retail
Performance |
| Timeline |
| Macquarie Bank |
| Dexus Convenience Retail |
Macquarie Bank and Dexus Convenience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and Dexus Convenience
The main advantage of trading using opposite Macquarie Bank and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank 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 Bank vs. NEWMONT PORATION CDI | Macquarie Bank vs. Ora Banda Mining | Macquarie Bank vs. Polymetals Resources | Macquarie Bank vs. Champion Iron |
| Dexus Convenience vs. Seven West Media | Dexus Convenience vs. Carlton Investments | Dexus Convenience vs. Clime Investment Management | Dexus Convenience vs. Centaurus 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |