Correlation Between Vicinity Centres and Dexus Property
Can any of the company-specific risk be diversified away by investing in both Vicinity Centres and Dexus Property 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 Vicinity Centres and Dexus Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vicinity Centres Re and Dexus Property Group, you can compare the effects of market volatilities on Vicinity Centres and Dexus Property 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 Vicinity Centres with a short position of Dexus Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vicinity Centres and Dexus Property.
Diversification Opportunities for Vicinity Centres and Dexus Property
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vicinity and Dexus is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Vicinity Centres Re and Dexus Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexus Property Group and Vicinity Centres 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 Vicinity Centres Re are associated (or correlated) with Dexus Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexus Property Group has no effect on the direction of Vicinity Centres i.e., Vicinity Centres and Dexus Property go up and down completely randomly.
Pair Corralation between Vicinity Centres and Dexus Property
Assuming the 90 days trading horizon Vicinity Centres is expected to generate 1.2 times less return on investment than Dexus Property. But when comparing it to its historical volatility, Vicinity Centres Re is 1.51 times less risky than Dexus Property. It trades about 0.18 of its potential returns per unit of risk. Dexus Property Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 721.00 in Dexus Property Group on December 5, 2024 and sell it today you would earn a total of 36.00 from holding Dexus Property Group or generate 4.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Vicinity Centres Re vs. Dexus Property Group
Performance |
Timeline |
Vicinity Centres |
Dexus Property Group |
Vicinity Centres and Dexus Property Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vicinity Centres and Dexus Property
The main advantage of trading using opposite Vicinity Centres and Dexus Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicinity Centres position performs unexpectedly, Dexus Property 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 Property will offset losses from the drop in Dexus Property's long position.Vicinity Centres vs. National Storage REIT | Vicinity Centres vs. Dicker Data | Vicinity Centres vs. Genetic Technologies | Vicinity Centres vs. Dug Technology |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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