Correlation Between Charter Hall and Lottery
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Lottery 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 Lottery 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 Lottery, you can compare the effects of market volatilities on Charter Hall and Lottery 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 Lottery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Lottery.
Diversification Opportunities for Charter Hall and Lottery
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Charter and Lottery is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Education and Lottery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lottery 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 Lottery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lottery has no effect on the direction of Charter Hall i.e., Charter Hall and Lottery go up and down completely randomly.
Pair Corralation between Charter Hall and Lottery
Assuming the 90 days trading horizon Charter Hall Education is expected to under-perform the Lottery. In addition to that, Charter Hall is 1.56 times more volatile than Lottery. It trades about 0.0 of its total potential returns per unit of risk. Lottery is currently generating about 0.04 per unit of volatility. If you would invest 508.00 in Lottery on September 3, 2024 and sell it today you would earn a total of 10.00 from holding Lottery or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Education vs. Lottery
Performance |
| Timeline |
| Charter Hall Education |
| Lottery |
Charter Hall and Lottery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Lottery
The main advantage of trading using opposite Charter Hall and Lottery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Lottery 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 Lottery will offset losses from the drop in Lottery's long position.| Charter Hall vs. Charter Hall Retail | Charter Hall vs. GDI Property Group | Charter Hall vs. Champion Iron | Charter Hall vs. iShares Global Healthcare |
| Lottery vs. Charter Hall Education | Lottery vs. Dexus Convenience Retail | Lottery vs. Sky Metals | Lottery vs. Kip McGrath Education |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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