Correlation Between Charter Hall and Austal
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Austal 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 Austal 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 Austal, you can compare the effects of market volatilities on Charter Hall and Austal 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 Austal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Austal.
Diversification Opportunities for Charter Hall and Austal
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charter and Austal is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Austal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austal 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 Austal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austal has no effect on the direction of Charter Hall i.e., Charter Hall and Austal go up and down completely randomly.
Pair Corralation between Charter Hall and Austal
Assuming the 90 days trading horizon Charter Hall is expected to generate 1.66 times less return on investment than Austal. But when comparing it to its historical volatility, Charter Hall Retail is 1.28 times less risky than Austal. It trades about 0.22 of its potential returns per unit of risk. Austal is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 305.00 in Austal on October 23, 2024 and sell it today you would earn a total of 19.00 from holding Austal or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Charter Hall Retail vs. Austal
Performance |
| Timeline |
| Charter Hall Retail |
| Austal |
Charter Hall and Austal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Austal
The main advantage of trading using opposite Charter Hall and Austal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Austal 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 Austal will offset losses from the drop in Austal's long position.| Charter Hall vs. Scentre Group | Charter Hall vs. Vicinity Centres Re | Charter Hall vs. Cromwell Property Group | Charter Hall vs. Carindale Property Trust |
| Austal vs. Carawine Resources Limited | Austal vs. Charter Hall Retail | Austal vs. Zoom2u Technologies | Austal 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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