Correlation Between ALERION CLEANPOWER and DEXUS

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

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

Diversification Opportunities for ALERION CLEANPOWER and DEXUS

0.05

Correlation Coefficient

ALERION CLEANPOWER  DEXUS

Significant diversification

The 3 months correlation between ALERION and DEXUS is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding ALERION CLEANPOWER and DEXUS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEXUS and ALERION CLEANPOWER 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 ALERION CLEANPOWER are associated (or correlated) with DEXUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEXUS has no effect on the direction of ALERION CLEANPOWER i.e., ALERION CLEANPOWER and DEXUS go up and down completely randomly.

Pair Corralation between ALERION CLEANPOWER and DEXUS

Assuming the 90 days trading horizon ALERION CLEANPOWER is expected to under-perform the DEXUS. In addition to that, ALERION CLEANPOWER is 2.03 times more volatile than DEXUS. It trades about -0.01 of its total potential returns per unit of risk. DEXUS is currently generating about 0.01 per unit of volatility. If you would invest  405.00  in DEXUS on October 26, 2024 and sell it today you would earn a total of  2.00  from holding DEXUS or generate 0.49% return on investment over 90 days.

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

ALERION CLEANPOWER  vs.  DEXUS

ALERION CLEANPOWER

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days ALERION CLEANPOWER has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ALERION CLEANPOWER is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

DEXUS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DEXUS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, DEXUS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ALERION CLEANPOWER and DEXUS

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

The idea behind ALERION CLEANPOWER and DEXUS 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.