Correlation Between Charter Hall and Retail Food
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Retail Food 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 Retail Food 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 Retail Food Group, you can compare the effects of market volatilities on Charter Hall and Retail Food 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 Retail Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Retail Food.
Diversification Opportunities for Charter Hall and Retail Food
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Charter and Retail is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Long and Retail Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Food Group 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 Retail Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Food Group has no effect on the direction of Charter Hall i.e., Charter Hall and Retail Food go up and down completely randomly.
Pair Corralation between Charter Hall and Retail Food
Assuming the 90 days trading horizon Charter Hall Long is expected to generate 0.48 times more return on investment than Retail Food. However, Charter Hall Long is 2.1 times less risky than Retail Food. It trades about -0.15 of its potential returns per unit of risk. Retail Food Group is currently generating about -0.08 per unit of risk. If you would invest 391.00 in Charter Hall Long on September 13, 2024 and sell it today you would lose (13.00) from holding Charter Hall Long or give up 3.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Charter Hall Long vs. Retail Food Group
Performance |
| Timeline |
| Charter Hall Long |
| Retail Food Group |
Charter Hall and Retail Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Retail Food
The main advantage of trading using opposite Charter Hall and Retail Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Retail Food 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 Retail Food will offset losses from the drop in Retail Food's long position.| Charter Hall vs. Scentre Group | Charter Hall vs. Vicinity Centres Re | Charter Hall vs. Charter Hall Retail | Charter Hall vs. Cromwell Property Group |
| Retail Food vs. My Foodie Box | Retail Food vs. Queste Communications | Retail Food vs. Clime Investment Management | Retail Food vs. Regal Funds Management |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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