Correlation Between Charter Hall and Flagship Investments
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Flagship Investments 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 Flagship Investments 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 Flagship Investments, you can compare the effects of market volatilities on Charter Hall and Flagship Investments 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 Flagship Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Flagship Investments.
Diversification Opportunities for Charter Hall and Flagship Investments
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Charter and Flagship is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Education and Flagship Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flagship Investments 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 Flagship Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flagship Investments has no effect on the direction of Charter Hall i.e., Charter Hall and Flagship Investments go up and down completely randomly.
Pair Corralation between Charter Hall and Flagship Investments
Assuming the 90 days trading horizon Charter Hall is expected to generate 6.48 times less return on investment than Flagship Investments. In addition to that, Charter Hall is 1.07 times more volatile than Flagship Investments. It trades about 0.01 of its total potential returns per unit of risk. Flagship Investments is currently generating about 0.08 per unit of volatility. If you would invest 166.00 in Flagship Investments on September 2, 2024 and sell it today you would earn a total of 49.00 from holding Flagship Investments or generate 29.52% 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. Flagship Investments
Performance |
| Timeline |
| Charter Hall Education |
| Flagship Investments |
Charter Hall and Flagship Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Flagship Investments
The main advantage of trading using opposite Charter Hall and Flagship Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Flagship Investments 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 Flagship Investments will offset losses from the drop in Flagship Investments' 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 |
| Flagship Investments vs. Lendlease Group | Flagship Investments vs. Hutchison Telecommunications | Flagship Investments vs. BSP Financial Group | Flagship Investments vs. National Australia Bank |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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