Correlation Between Dexus Convenience and Prodigy Gold

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Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and Prodigy Gold 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 Convenience and Prodigy Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dexus Convenience Retail and Prodigy Gold NL, you can compare the effects of market volatilities on Dexus Convenience and Prodigy Gold 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 Convenience with a short position of Prodigy Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and Prodigy Gold.

Diversification Opportunities for Dexus Convenience and Prodigy Gold

-0.08
  Correlation Coefficient

Good diversification

The 3 months correlation between Dexus and Prodigy is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and Prodigy Gold NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodigy Gold NL and Dexus Convenience 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 Convenience Retail are associated (or correlated) with Prodigy Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodigy Gold NL has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and Prodigy Gold go up and down completely randomly.

Pair Corralation between Dexus Convenience and Prodigy Gold

If you would invest  289.00  in Dexus Convenience Retail on October 8, 2024 and sell it today you would earn a total of  6.00  from holding Dexus Convenience Retail or generate 2.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Dexus Convenience Retail  vs.  Prodigy Gold NL

 Performance 
       Timeline  
Dexus Convenience Retail 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Prodigy Gold NL 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Prodigy Gold NL are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Prodigy Gold unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dexus Convenience and Prodigy Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dexus Convenience and Prodigy Gold

The main advantage of trading using opposite Dexus Convenience and Prodigy Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, Prodigy Gold 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 Prodigy Gold will offset losses from the drop in Prodigy Gold's long position.
The idea behind Dexus Convenience Retail and Prodigy Gold NL 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.
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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