Correlation Between Aristocrat Leisure and Charter Hall
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure and Charter Hall 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 Aristocrat Leisure and Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure and Charter Hall Education, you can compare the effects of market volatilities on Aristocrat Leisure and Charter Hall 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 Aristocrat Leisure with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and Charter Hall.
Diversification Opportunities for Aristocrat Leisure and Charter Hall
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aristocrat and Charter is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure and Charter Hall Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Hall Education and Aristocrat Leisure 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 Aristocrat Leisure are associated (or correlated) with Charter Hall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Hall Education has no effect on the direction of Aristocrat Leisure i.e., Aristocrat Leisure and Charter Hall go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and Charter Hall
Assuming the 90 days trading horizon Aristocrat Leisure is expected to generate 1.44 times more return on investment than Charter Hall. However, Aristocrat Leisure is 1.44 times more volatile than Charter Hall Education. It trades about 0.13 of its potential returns per unit of risk. Charter Hall Education is currently generating about -0.01 per unit of risk. If you would invest 7,156 in Aristocrat Leisure on November 9, 2024 and sell it today you would earn a total of 325.00 from holding Aristocrat Leisure or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aristocrat Leisure vs. Charter Hall Education
Performance |
| Timeline |
| Aristocrat Leisure |
| Charter Hall Education |
Aristocrat Leisure and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and Charter Hall
The main advantage of trading using opposite Aristocrat Leisure and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure position performs unexpectedly, Charter Hall 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 Charter Hall will offset losses from the drop in Charter Hall's long position.| Aristocrat Leisure vs. Global Health | Aristocrat Leisure vs. Ramsay Health Care | Aristocrat Leisure vs. Vitura Health Limited | Aristocrat Leisure vs. Sky Metals |
| Charter Hall vs. Scentre Group | Charter Hall vs. Vicinity Centres Re | Charter Hall vs. Charter Hall Retail | Charter Hall vs. Cromwell Property Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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