Correlation Between Charter Hall and Kip McGrath
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Kip McGrath 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 Kip McGrath 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 Kip McGrath Education, you can compare the effects of market volatilities on Charter Hall and Kip McGrath 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 Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Kip McGrath.
Diversification Opportunities for Charter Hall and Kip McGrath
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Charter and Kip is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Education and Kip McGrath Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kip McGrath Education 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 Kip McGrath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kip McGrath Education has no effect on the direction of Charter Hall i.e., Charter Hall and Kip McGrath go up and down completely randomly.
Pair Corralation between Charter Hall and Kip McGrath
Assuming the 90 days trading horizon Charter Hall Education is expected to generate 0.41 times more return on investment than Kip McGrath. However, Charter Hall Education is 2.45 times less risky than Kip McGrath. It trades about -0.01 of its potential returns per unit of risk. Kip McGrath Education is currently generating about -0.01 per unit of risk. If you would invest 302.00 in Charter Hall Education on November 5, 2024 and sell it today you would lose (42.00) from holding Charter Hall Education or give up 13.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Education vs. Kip McGrath Education
Performance |
| Timeline |
| Charter Hall Education |
| Kip McGrath Education |
Charter Hall and Kip McGrath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Kip McGrath
The main advantage of trading using opposite Charter Hall and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Kip McGrath 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 Kip McGrath will offset losses from the drop in Kip McGrath's long position.| Charter Hall vs. AiMedia Technologies | Charter Hall vs. Duxton Broadacre Farms | Charter Hall vs. Diversified United Investment | Charter Hall vs. Seven West Media |
| Kip McGrath vs. Dalaroo Metals | Kip McGrath vs. Black Rock Mining | Kip McGrath vs. ACDC Metals | Kip McGrath vs. Perseus Mining |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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