Correlation Between Charter Hall and Super Retail
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Super Retail 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 Super Retail 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 Super Retail Group, you can compare the effects of market volatilities on Charter Hall and Super Retail 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 Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Super Retail.
Diversification Opportunities for Charter Hall and Super Retail
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Charter and Super is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Education and Super Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Retail Group 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 Super Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Retail Group has no effect on the direction of Charter Hall i.e., Charter Hall and Super Retail go up and down completely randomly.
Pair Corralation between Charter Hall and Super Retail
Assuming the 90 days trading horizon Charter Hall is expected to generate 17.73 times less return on investment than Super Retail. But when comparing it to its historical volatility, Charter Hall Education is 1.12 times less risky than Super Retail. It trades about 0.0 of its potential returns per unit of risk. Super Retail Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,023 in Super Retail Group on August 31, 2024 and sell it today you would earn a total of 450.00 from holding Super Retail Group or generate 43.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Education vs. Super Retail Group
Performance |
| Timeline |
| Charter Hall Education |
| Super Retail Group |
Charter Hall and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Super Retail
The main advantage of trading using opposite Charter Hall and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Super Retail 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 Super Retail will offset losses from the drop in Super Retail's long position.| Charter Hall vs. Aurelia Metals | Charter Hall vs. Hutchison Telecommunications | Charter Hall vs. Sandon Capital Investments | Charter Hall vs. Truscott Mining Corp |
| Super Retail vs. Aneka Tambang Tbk | Super Retail vs. Unibail Rodamco Westfield SE | Super Retail vs. Macquarie Group | Super Retail vs. Commonwealth 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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