Correlation Between Charter Hall and Australian United
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Australian United 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 Australian United 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 Australian United Investment, you can compare the effects of market volatilities on Charter Hall and Australian United 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 Australian United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Australian United.
Diversification Opportunities for Charter Hall and Australian United
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Charter and Australian is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Australian United Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian United 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 Australian United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian United has no effect on the direction of Charter Hall i.e., Charter Hall and Australian United go up and down completely randomly.
Pair Corralation between Charter Hall and Australian United
Assuming the 90 days trading horizon Charter Hall is expected to generate 36.9 times less return on investment than Australian United. In addition to that, Charter Hall is 1.78 times more volatile than Australian United Investment. It trades about 0.0 of its total potential returns per unit of risk. Australian United Investment is currently generating about 0.05 per unit of volatility. If you would invest 923.00 in Australian United Investment on August 25, 2024 and sell it today you would earn a total of 173.00 from holding Australian United Investment or generate 18.74% 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. Australian United Investment
Performance |
| Timeline |
| Charter Hall Retail |
| Australian United |
Charter Hall and Australian United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Australian United
The main advantage of trading using opposite Charter Hall and Australian United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Australian United 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 Australian United will offset losses from the drop in Australian United's 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 |
| Australian United vs. Metro Mining | Australian United vs. Super Retail Group | Australian United vs. Zoom2u Technologies | Australian United vs. Richmond Vanadium Technology |
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.
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