Correlation Between Charter Hall and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Aurelia Metals 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 Charter Hall and Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Hall Long and Aurelia Metals, you can compare the effects of market volatilities on Charter Hall and Aurelia Metals 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 Charter Hall with a short position of Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Aurelia Metals.
Diversification Opportunities for Charter Hall and Aurelia Metals
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charter and Aurelia is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Long and Aurelia Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Charter Hall 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 Charter Hall Long are associated (or correlated) with Aurelia Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelia Metals has no effect on the direction of Charter Hall i.e., Charter Hall and Aurelia Metals go up and down completely randomly.
Pair Corralation between Charter Hall and Aurelia Metals
Assuming the 90 days trading horizon Charter Hall Long is expected to generate 0.3 times more return on investment than Aurelia Metals. However, Charter Hall Long is 3.35 times less risky than Aurelia Metals. It trades about 0.11 of its potential returns per unit of risk. Aurelia Metals is currently generating about 0.0 per unit of risk. If you would invest 340.00 in Charter Hall Long on September 1, 2024 and sell it today you would earn a total of 64.00 from holding Charter Hall Long or generate 18.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
Charter Hall Long vs. Aurelia Metals
Performance |
| Timeline |
| Charter Hall Long |
| Aurelia Metals |
Charter Hall and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Aurelia Metals
The main advantage of trading using opposite Charter Hall and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Aurelia Metals 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 Aurelia Metals will offset losses from the drop in Aurelia Metals' long position.| Charter Hall vs. Aurelia Metals | Charter Hall vs. Regal Funds Management | Charter Hall vs. Truscott Mining Corp | Charter Hall vs. Centaurus Metals |
| Aurelia Metals vs. Northern Star Resources | Aurelia Metals vs. Evolution Mining | Aurelia Metals vs. Bluescope Steel | Aurelia Metals vs. Sandfire Resources NL |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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