Correlation Between Charter Hall and Bell Financial
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Bell Financial 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 Bell Financial 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 Bell Financial Group, you can compare the effects of market volatilities on Charter Hall and Bell Financial 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 Bell Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Bell Financial.
Diversification Opportunities for Charter Hall and Bell Financial
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Charter and Bell is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Education and Bell Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Financial 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 Education are associated (or correlated) with Bell Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Financial Group has no effect on the direction of Charter Hall i.e., Charter Hall and Bell Financial go up and down completely randomly.
Pair Corralation between Charter Hall and Bell Financial
Assuming the 90 days trading horizon Charter Hall is expected to generate 5.45 times less return on investment than Bell Financial. But when comparing it to its historical volatility, Charter Hall Education is 1.2 times less risky than Bell Financial. It trades about 0.01 of its potential returns per unit of risk. Bell Financial Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 104.00 in Bell Financial Group on September 14, 2024 and sell it today you would earn a total of 30.00 from holding Bell Financial Group or generate 28.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Charter Hall Education vs. Bell Financial Group
Performance |
| Timeline |
| Charter Hall Education |
| Bell Financial Group |
Charter Hall and Bell Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Bell Financial
The main advantage of trading using opposite Charter Hall and Bell Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Bell Financial 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 Bell Financial will offset losses from the drop in Bell Financial's long position.| Charter Hall vs. Galena Mining | Charter Hall vs. Ora Banda Mining | Charter Hall vs. Retail Food Group | Charter Hall vs. Kip McGrath Education |
| Bell Financial vs. REGAL ASIAN INVESTMENTS | Bell Financial vs. Auctus Alternative Investments | Bell Financial vs. Super Retail Group | Bell Financial vs. Charter Hall Education |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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