Correlation Between Charter Hall and Star Entertainment
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Star Entertainment 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 Star Entertainment 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 Star Entertainment Group, you can compare the effects of market volatilities on Charter Hall and Star Entertainment 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 Star Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Star Entertainment.
Diversification Opportunities for Charter Hall and Star Entertainment
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charter and Star is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Education and Star Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Entertainment 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 Star Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Entertainment has no effect on the direction of Charter Hall i.e., Charter Hall and Star Entertainment go up and down completely randomly.
Pair Corralation between Charter Hall and Star Entertainment
Assuming the 90 days trading horizon Charter Hall Education is expected to generate 0.09 times more return on investment than Star Entertainment. However, Charter Hall Education is 10.98 times less risky than Star Entertainment. It trades about -0.14 of its potential returns per unit of risk. Star Entertainment Group is currently generating about -0.16 per unit of risk. If you would invest 263.00 in Charter Hall Education on October 25, 2024 and sell it today you would lose (7.00) from holding Charter Hall Education or give up 2.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Education vs. Star Entertainment Group
Performance |
| Timeline |
| Charter Hall Education |
| Star Entertainment |
Charter Hall and Star Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Star Entertainment
The main advantage of trading using opposite Charter Hall and Star Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Star Entertainment 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 Star Entertainment will offset losses from the drop in Star Entertainment's long position.| Charter Hall vs. IDP Education | Charter Hall vs. Gold Road Resources | Charter Hall vs. Duxton Broadacre Farms | Charter Hall vs. Sonic Healthcare |
| Star Entertainment vs. Hudson Investment Group | Star Entertainment vs. G8 Education | Star Entertainment vs. Charter Hall Education | Star Entertainment vs. Djerriwarrh Investments |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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