Correlation Between Charter Hall and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Aurelia 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 Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Hall Retail and Aurelia Metals, you can compare the effects of market volatilities on Charter Hall and Aurelia 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 Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Aurelia Metals.
Diversification Opportunities for Charter Hall and Aurelia Metals
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Charter and Aurelia is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Aurelia Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia 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 Retail are associated (or correlated) with Aurelia Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelia Metals has no effect on the direction of Charter Hall i.e., Charter Hall and Aurelia Metals go up and down completely randomly.
Pair Corralation between Charter Hall and Aurelia Metals
Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 0.25 times more return on investment than Aurelia Metals. However, Charter Hall Retail is 4.06 times less risky than Aurelia Metals. It trades about 0.02 of its potential returns per unit of risk. Aurelia Metals is currently generating about -0.04 per unit of risk. If you would invest 343.00 in Charter Hall Retail on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Charter Hall Retail or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Retail vs. Aurelia Metals
Performance |
| Timeline |
| Charter Hall Retail |
| Aurelia Metals |
Charter Hall and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Aurelia Metals
The main advantage of trading using opposite Charter Hall and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Aurelia 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 Aurelia Metals will offset losses from the drop in Aurelia Metals' long position.| Charter Hall vs. Cromwell Property Group | Charter Hall vs. GDI Property Group | Charter Hall vs. Australian Unity Office |
| Aurelia Metals vs. Aristocrat Leisure | Aurelia Metals vs. Genetic Technologies | Aurelia Metals vs. Thorney Technologies | Aurelia Metals vs. Ras Technology Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |