Correlation Between Charter Hall and Ironbark Capital
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Ironbark Capital 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 Ironbark Capital 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 Ironbark Capital, you can compare the effects of market volatilities on Charter Hall and Ironbark Capital 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 Ironbark Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Ironbark Capital.
Diversification Opportunities for Charter Hall and Ironbark Capital
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Charter and Ironbark is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Education and Ironbark Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ironbark Capital 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 Ironbark Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ironbark Capital has no effect on the direction of Charter Hall i.e., Charter Hall and Ironbark Capital go up and down completely randomly.
Pair Corralation between Charter Hall and Ironbark Capital
Assuming the 90 days trading horizon Charter Hall Education is expected to under-perform the Ironbark Capital. But the stock apears to be less risky and, when comparing its historical volatility, Charter Hall Education is 1.3 times less risky than Ironbark Capital. The stock trades about -0.15 of its potential returns per unit of risk. The Ironbark Capital is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 46.00 in Ironbark Capital on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Ironbark Capital or generate 0.0% 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. Ironbark Capital
Performance |
| Timeline |
| Charter Hall Education |
| Ironbark Capital |
Charter Hall and Ironbark Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Ironbark Capital
The main advantage of trading using opposite Charter Hall and Ironbark Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Ironbark Capital 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 Ironbark Capital will offset losses from the drop in Ironbark Capital's long position.| Charter Hall vs. Scentre Group | Charter Hall vs. Vicinity Centres Re | Charter Hall vs. Cromwell Property Group | Charter Hall vs. GDI Property Group |
| Ironbark Capital vs. GQG Partners DRC | Ironbark Capital vs. MFF Capital Investments | Ironbark Capital vs. L1 Long Short | Ironbark Capital vs. BKI Investment |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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