Correlation Between Charter Hall and AMP
Can any of the company-specific risk be diversified away by investing in both Charter Hall and AMP 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 AMP 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 AMP, you can compare the effects of market volatilities on Charter Hall and AMP 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 AMP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and AMP.
Diversification Opportunities for Charter Hall and AMP
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Charter and AMP is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Education and AMP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMP 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 AMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMP has no effect on the direction of Charter Hall i.e., Charter Hall and AMP go up and down completely randomly.
Pair Corralation between Charter Hall and AMP
Assuming the 90 days trading horizon Charter Hall is expected to generate 3.06 times less return on investment than AMP. But when comparing it to its historical volatility, Charter Hall Education is 1.68 times less risky than AMP. It trades about 0.08 of its potential returns per unit of risk. AMP is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 105.00 in AMP on September 2, 2024 and sell it today you would earn a total of 51.00 from holding AMP or generate 48.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Education vs. AMP
Performance |
| Timeline |
| Charter Hall Education |
| AMP |
Charter Hall and AMP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and AMP
The main advantage of trading using opposite Charter Hall and AMP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, AMP 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 AMP will offset losses from the drop in AMP'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 |
| AMP vs. Wt Financial Group | AMP vs. Perpetual Credit Income | AMP vs. Bank of Queensland | AMP vs. Srj Technologies Group |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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