Correlation Between Tyson Foods and DEXUS

Can any of the company-specific risk be diversified away by investing in both Tyson Foods and DEXUS 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 Tyson Foods and DEXUS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tyson Foods and DEXUS, you can compare the effects of market volatilities on Tyson Foods and DEXUS 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 Tyson Foods with a short position of DEXUS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and DEXUS.

Diversification Opportunities for Tyson Foods and DEXUS

-0.47

Correlation Coefficient

Tyson Foods  DEXUS

Very good diversification

The 3 months correlation between Tyson and DEXUS is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and DEXUS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEXUS and Tyson Foods 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 Tyson Foods are associated (or correlated) with DEXUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEXUS has no effect on the direction of Tyson Foods i.e., Tyson Foods and DEXUS go up and down completely randomly.

Pair Corralation between Tyson Foods and DEXUS

Assuming the 90 days trading horizon Tyson Foods is expected to generate 0.85 times more return on investment than DEXUS. However, Tyson Foods is 1.18 times less risky than DEXUS. It trades about 0.08 of its potential returns per unit of risk. DEXUS is currently generating about 0.04 per unit of risk. If you would invest  4,579  in Tyson Foods on September 4, 2024 and sell it today you would earn a total of  1,557  from holding Tyson Foods or generate 34.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Tyson Foods  vs.  DEXUS

Tyson Foods

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tyson Foods are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Tyson Foods may actually be approaching a critical reversion point that can send shares even higher in January 2025.

DEXUS

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DEXUS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, DEXUS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tyson Foods and DEXUS

The main advantage of trading using opposite Tyson Foods and DEXUS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods position performs unexpectedly, DEXUS 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 will offset losses from the drop in DEXUS's long position.

The idea behind Tyson Foods and DEXUS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.