Correlation Between Nufarm Finance and Dexus Convenience
Can any of the company-specific risk be diversified away by investing in both Nufarm Finance 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 Nufarm Finance and Dexus Convenience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nufarm Finance NZ and Dexus Convenience Retail, you can compare the effects of market volatilities on Nufarm Finance 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 Nufarm Finance with a short position of Dexus Convenience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nufarm Finance and Dexus Convenience.
Diversification Opportunities for Nufarm Finance and Dexus Convenience
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nufarm and Dexus is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nufarm Finance NZ 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 Nufarm Finance 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 Nufarm Finance NZ 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 Nufarm Finance i.e., Nufarm Finance and Dexus Convenience go up and down completely randomly.
Pair Corralation between Nufarm Finance and Dexus Convenience
Assuming the 90 days trading horizon Nufarm Finance is expected to generate 1.96 times less return on investment than Dexus Convenience. But when comparing it to its historical volatility, Nufarm Finance NZ is 1.61 times less risky than Dexus Convenience. It trades about 0.04 of its potential returns per unit of risk. Dexus Convenience Retail is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 249.00 in Dexus Convenience Retail on September 14, 2024 and sell it today you would earn a total of 39.00 from holding Dexus Convenience Retail or generate 15.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nufarm Finance NZ vs. Dexus Convenience Retail
Performance |
| Timeline |
| Nufarm Finance NZ |
| Dexus Convenience Retail |
Nufarm Finance and Dexus Convenience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nufarm Finance and Dexus Convenience
The main advantage of trading using opposite Nufarm Finance and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nufarm Finance 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.| Nufarm Finance vs. Australian Unity Office | Nufarm Finance vs. Leeuwin Metals | Nufarm Finance vs. Catalyst Metals | Nufarm Finance vs. Group 6 Metals |
| Dexus Convenience vs. Toys R Us | Dexus Convenience vs. Queste Communications | Dexus Convenience vs. TPG Telecom | Dexus Convenience vs. Computershare |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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