Correlation Between AiMedia Technologies and Dexus Convenience

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

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

Diversification Opportunities for AiMedia Technologies and Dexus Convenience

0.27

Correlation Coefficient

AiMedia Technologies  Dexus Convenience

Modest diversification

The 3 months correlation between AiMedia and Dexus is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding AiMedia Technologies 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 AiMedia Technologies 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 AiMedia Technologies 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 AiMedia Technologies i.e., AiMedia Technologies and Dexus Convenience go up and down completely randomly.

Pair Corralation between AiMedia Technologies and Dexus Convenience

Assuming the 90 days trading horizon AiMedia Technologies is expected to under-perform the Dexus Convenience. In addition to that, AiMedia Technologies is 3.68 times more volatile than Dexus Convenience Retail. It trades about -0.03 of its total potential returns per unit of risk. Dexus Convenience Retail is currently generating about -0.03 per unit of volatility. If you would invest  289.00  in Dexus Convenience Retail on December 22, 2024 and sell it today you would lose (9.00) from holding Dexus Convenience Retail or give up 3.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AiMedia Technologies  vs.  Dexus Convenience Retail

AiMedia Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days AiMedia Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Dexus Convenience Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dexus Convenience Retail has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Dexus Convenience is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AiMedia Technologies and Dexus Convenience

The main advantage of trading using opposite AiMedia Technologies and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AiMedia Technologies 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.

The idea behind AiMedia Technologies and Dexus Convenience Retail 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.