Correlation Between Argo Investments and Dexus Convenience
Can any of the company-specific risk be diversified away by investing in both Argo Investments 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 Argo Investments and Dexus Convenience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Investments and Dexus Convenience Retail, you can compare the effects of market volatilities on Argo Investments 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 Argo Investments with a short position of Dexus Convenience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Investments and Dexus Convenience.
Diversification Opportunities for Argo Investments and Dexus Convenience
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Argo and Dexus is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Argo Investments 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 Argo Investments 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 Argo Investments 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 Argo Investments i.e., Argo Investments and Dexus Convenience go up and down completely randomly.
Pair Corralation between Argo Investments and Dexus Convenience
Assuming the 90 days trading horizon Argo Investments is expected to under-perform the Dexus Convenience. But the stock apears to be less risky and, when comparing its historical volatility, Argo Investments is 1.25 times less risky than Dexus Convenience. The stock trades about -0.05 of its potential returns per unit of risk. The Dexus Convenience Retail is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 293.00 in Dexus Convenience Retail on September 26, 2024 and sell it today you would lose (1.00) from holding Dexus Convenience Retail or give up 0.34% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Argo Investments vs. Dexus Convenience Retail
Performance |
Timeline |
Argo Investments |
Dexus Convenience Retail |
Argo Investments and Dexus Convenience Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Argo Investments and Dexus Convenience
The main advantage of trading using opposite Argo Investments and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Investments 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.Argo Investments vs. Richmond Vanadium Technology | Argo Investments vs. Energy Technologies Limited | Argo Investments vs. Advanced Braking Technology | Argo Investments vs. Charter Hall Retail |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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