Correlation Between Charter Hall and Aristocrat Leisure
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Aristocrat Leisure 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 Aristocrat Leisure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Hall Education and Aristocrat Leisure, you can compare the effects of market volatilities on Charter Hall and Aristocrat Leisure 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 Aristocrat Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Aristocrat Leisure.
Diversification Opportunities for Charter Hall and Aristocrat Leisure
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Charter and Aristocrat is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Education and Aristocrat Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristocrat Leisure 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 Education are associated (or correlated) with Aristocrat Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristocrat Leisure has no effect on the direction of Charter Hall i.e., Charter Hall and Aristocrat Leisure go up and down completely randomly.
Pair Corralation between Charter Hall and Aristocrat Leisure
Assuming the 90 days trading horizon Charter Hall Education is expected to under-perform the Aristocrat Leisure. But the stock apears to be less risky and, when comparing its historical volatility, Charter Hall Education is 1.44 times less risky than Aristocrat Leisure. The stock trades about -0.01 of its potential returns per unit of risk. The Aristocrat Leisure is currently generating about 0.13 of returns per unit of risk over similar time horizon. 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 |
Charter Hall Education vs. Aristocrat Leisure
Performance |
| Timeline |
| Charter Hall Education |
| Aristocrat Leisure |
Charter Hall and Aristocrat Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Aristocrat Leisure
The main advantage of trading using opposite Charter Hall and Aristocrat Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Aristocrat Leisure 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 Aristocrat Leisure will offset losses from the drop in Aristocrat Leisure'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 |
| Aristocrat Leisure vs. Global Health | Aristocrat Leisure vs. Ramsay Health Care | Aristocrat Leisure vs. Vitura Health Limited | Aristocrat Leisure vs. Sky Metals |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |