Correlation Between Charter Hall and Infomedia
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Infomedia 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 Infomedia 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 Infomedia, you can compare the effects of market volatilities on Charter Hall and Infomedia 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 Infomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Infomedia.
Diversification Opportunities for Charter Hall and Infomedia
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Charter and Infomedia is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Long and Infomedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infomedia 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 Infomedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infomedia has no effect on the direction of Charter Hall i.e., Charter Hall and Infomedia go up and down completely randomly.
Pair Corralation between Charter Hall and Infomedia
Assuming the 90 days trading horizon Charter Hall Long is expected to generate 0.42 times more return on investment than Infomedia. However, Charter Hall Long is 2.36 times less risky than Infomedia. It trades about -0.03 of its potential returns per unit of risk. Infomedia is currently generating about -0.11 per unit of risk. If you would invest 390.00 in Charter Hall Long on September 12, 2024 and sell it today you would lose (11.00) from holding Charter Hall Long or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Long vs. Infomedia
Performance |
| Timeline |
| Charter Hall Long |
| Infomedia |
Charter Hall and Infomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Infomedia
The main advantage of trading using opposite Charter Hall and Infomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Infomedia 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 Infomedia will offset losses from the drop in Infomedia's long position.| Charter Hall vs. Retail Food Group | Charter Hall vs. Falcon Metals | Charter Hall vs. Black Rock Mining | Charter Hall vs. Stelar Metals |
| Infomedia vs. Aneka Tambang Tbk | Infomedia vs. BHP Group Limited | Infomedia vs. Commonwealth Bank | Infomedia vs. Commonwealth Bank of |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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