Correlation Between Dexus Convenience and Rubicon Water

Can any of the company-specific risk be diversified away by investing in both Dexus Convenience and Rubicon Water 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 Rubicon Water 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 Rubicon Water, you can compare the effects of market volatilities on Dexus Convenience and Rubicon Water 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 Rubicon Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexus Convenience and Rubicon Water.

Diversification Opportunities for Dexus Convenience and Rubicon Water

-0.55

Correlation Coefficient

Dexus Convenience  Rubicon Water

Excellent diversification

The 3 months correlation between Dexus and Rubicon is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dexus Convenience Retail and Rubicon Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Water 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 Rubicon Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubicon Water has no effect on the direction of Dexus Convenience i.e., Dexus Convenience and Rubicon Water go up and down completely randomly.

Pair Corralation between Dexus Convenience and Rubicon Water

Assuming the 90 days trading horizon Dexus Convenience Retail is expected to generate 0.32 times more return on investment than Rubicon Water. However, Dexus Convenience Retail is 3.08 times less risky than Rubicon Water. It trades about -0.02 of its potential returns per unit of risk. Rubicon Water is currently generating about -0.12 per unit of risk. If you would invest  290.00  in Dexus Convenience Retail on November 29, 2024 and sell it today you would lose (5.00) from holding Dexus Convenience Retail or give up 1.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Dexus Convenience Retail  vs.  Rubicon Water

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.

Rubicon Water

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rubicon Water has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Dexus Convenience and Rubicon Water

The main advantage of trading using opposite Dexus Convenience and Rubicon Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexus Convenience position performs unexpectedly, Rubicon Water 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 Rubicon Water will offset losses from the drop in Rubicon Water's long position.

The idea behind Dexus Convenience Retail and Rubicon Water 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.