Correlation Between Cromwell Property and Charter Hall
Can any of the company-specific risk be diversified away by investing in both Cromwell Property 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 Cromwell Property and Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cromwell Property Group and Charter Hall Retail, you can compare the effects of market volatilities on Cromwell Property 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 Cromwell Property with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cromwell Property and Charter Hall.
Diversification Opportunities for Cromwell Property and Charter Hall
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cromwell and Charter is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cromwell Property Group and Charter Hall Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Hall Retail and Cromwell Property 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 Cromwell Property Group 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 Retail has no effect on the direction of Cromwell Property i.e., Cromwell Property and Charter Hall go up and down completely randomly.
Pair Corralation between Cromwell Property and Charter Hall
Assuming the 90 days trading horizon Cromwell Property Group is expected to under-perform the Charter Hall. In addition to that, Cromwell Property is 2.13 times more volatile than Charter Hall Retail. It trades about -0.21 of its total potential returns per unit of risk. Charter Hall Retail is currently generating about 0.02 per unit of volatility. If you would invest 343.00 in Charter Hall Retail on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Charter Hall Retail or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cromwell Property Group vs. Charter Hall Retail
Performance |
| Timeline |
| Cromwell Property |
| Charter Hall Retail |
Cromwell Property and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cromwell Property and Charter Hall
The main advantage of trading using opposite Cromwell Property and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cromwell Property 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.| Cromwell Property vs. Super Retail Group | Cromwell Property vs. Kingsrose Mining | Cromwell Property vs. Perseus Mining | Cromwell Property vs. Charter Hall Education |
| Charter Hall vs. Cromwell Property Group | Charter Hall vs. GDI Property Group | Charter Hall vs. Australian Unity Office |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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