Correlation Between Auctus Alternative and Dexus Convenience

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

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

Diversification Opportunities for Auctus Alternative and Dexus Convenience

0.28

Correlation Coefficient

Auctus Alternative  Dexus Convenience

Modest diversification

The 3 months correlation between Auctus and Dexus is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Auctus Alternative 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 Auctus Alternative 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 Auctus Alternative 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 Auctus Alternative i.e., Auctus Alternative and Dexus Convenience go up and down completely randomly.

Pair Corralation between Auctus Alternative and Dexus Convenience

Assuming the 90 days trading horizon Auctus Alternative Investments is expected to generate 2.79 times more return on investment than Dexus Convenience. However, Auctus Alternative is 2.79 times more volatile than Dexus Convenience Retail. It trades about 0.15 of its potential returns per unit of risk. Dexus Convenience Retail is currently generating about -0.02 per unit of risk. If you would invest  48.00  in Auctus Alternative Investments on December 2, 2024 and sell it today you would earn a total of  15.00  from holding Auctus Alternative Investments or generate 31.25% return on investment over 90 days.

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

Auctus Alternative Investments  vs.  Dexus Convenience Retail

Auctus Alternative

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Auctus Alternative Investments are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Auctus Alternative unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 Auctus Alternative and Dexus Convenience

The main advantage of trading using opposite Auctus Alternative and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auctus Alternative 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 Auctus Alternative Investments 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.