Correlation Between Charter Hall and Stelar Metals
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Stelar Metals 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 Stelar Metals 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 Stelar Metals, you can compare the effects of market volatilities on Charter Hall and Stelar Metals 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 Stelar Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Stelar Metals.
Diversification Opportunities for Charter Hall and Stelar Metals
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charter and Stelar is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Education and Stelar Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stelar Metals 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 Stelar Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stelar Metals has no effect on the direction of Charter Hall i.e., Charter Hall and Stelar Metals go up and down completely randomly.
Pair Corralation between Charter Hall and Stelar Metals
Assuming the 90 days trading horizon Charter Hall Education is expected to generate 0.27 times more return on investment than Stelar Metals. However, Charter Hall Education is 3.7 times less risky than Stelar Metals. It trades about -0.15 of its potential returns per unit of risk. Stelar Metals is currently generating about -0.08 per unit of risk. If you would invest 274.00 in Charter Hall Education on August 25, 2024 and sell it today you would lose (8.00) from holding Charter Hall Education or give up 2.92% 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. Stelar Metals
Performance |
| Timeline |
| Charter Hall Education |
| Stelar Metals |
Charter Hall and Stelar Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Stelar Metals
The main advantage of trading using opposite Charter Hall and Stelar Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Stelar Metals 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 Stelar Metals will offset losses from the drop in Stelar Metals' 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 |
| Stelar Metals vs. Aeon Metals | Stelar Metals vs. Mount Gibson Iron | Stelar Metals vs. Patriot Battery Metals | Stelar Metals vs. Champion Iron |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Global Correlations Find global opportunities by holding instruments from different markets |