Correlation Between DEXUS and Covivio SA
Can any of the company-specific risk be diversified away by investing in both DEXUS and Covivio SA 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 DEXUS and Covivio SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DEXUS and Covivio SA, you can compare the effects of market volatilities on DEXUS and Covivio SA 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 DEXUS with a short position of Covivio SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of DEXUS and Covivio SA.
Diversification Opportunities for DEXUS and Covivio SA
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DEXUS and Covivio is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding DEXUS and Covivio SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Covivio SA and DEXUS 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 DEXUS are associated (or correlated) with Covivio SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Covivio SA has no effect on the direction of DEXUS i.e., DEXUS and Covivio SA go up and down completely randomly.
Pair Corralation between DEXUS and Covivio SA
Assuming the 90 days trading horizon DEXUS is expected to generate 1.06 times more return on investment than Covivio SA. However, DEXUS is 1.06 times more volatile than Covivio SA. It trades about 0.06 of its potential returns per unit of risk. Covivio SA is currently generating about 0.06 per unit of risk. If you would invest 397.00 in DEXUS on December 27, 2024 and sell it today you would earn a total of 22.00 from holding DEXUS or generate 5.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
DEXUS vs. Covivio SA
Performance |
Timeline |
DEXUS |
Covivio SA |
DEXUS and Covivio SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DEXUS and Covivio SA
The main advantage of trading using opposite DEXUS and Covivio SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DEXUS position performs unexpectedly, Covivio SA 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 Covivio SA will offset losses from the drop in Covivio SA's long position.DEXUS vs. Preferred Bank | DEXUS vs. Direct Line Insurance | DEXUS vs. SLR Investment Corp | DEXUS vs. MEDCAW INVESTMENTS LS 01 |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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