Correlation Between BlackWall Property and Dexus Convenience

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

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

Diversification Opportunities for BlackWall Property and Dexus Convenience

0.16

Correlation Coefficient

BlackWall Property  Dexus Convenience

Average diversification

The 3 months correlation between BlackWall and Dexus is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding BlackWall Property Funds 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 BlackWall Property 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 BlackWall Property Funds 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 BlackWall Property i.e., BlackWall Property and Dexus Convenience go up and down completely randomly.

Pair Corralation between BlackWall Property and Dexus Convenience

Assuming the 90 days trading horizon BlackWall Property Funds is expected to generate 3.74 times more return on investment than Dexus Convenience. However, BlackWall Property is 3.74 times more volatile than Dexus Convenience Retail. It trades about 0.05 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  41.00  in BlackWall Property Funds on October 6, 2024 and sell it today you would earn a total of  2.00  from holding BlackWall Property Funds or generate 4.88% return on investment over 90 days.

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

BlackWall Property Funds  vs.  Dexus Convenience Retail

BlackWall Property Funds

Risk-Adjusted Performance

0 of 100

Very Weak

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

Dexus Convenience Retail

Risk-Adjusted Performance

0 of 100

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 BlackWall Property and Dexus Convenience

The main advantage of trading using opposite BlackWall Property and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackWall Property 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 BlackWall Property Funds 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.