Correlation Between Charter Hall and Credit Clear
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Credit Clear 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 Credit Clear 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 Credit Clear, you can compare the effects of market volatilities on Charter Hall and Credit Clear 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 Credit Clear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Credit Clear.
Diversification Opportunities for Charter Hall and Credit Clear
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Charter and Credit is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Credit Clear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Clear 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 Credit Clear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Clear has no effect on the direction of Charter Hall i.e., Charter Hall and Credit Clear go up and down completely randomly.
Pair Corralation between Charter Hall and Credit Clear
Assuming the 90 days trading horizon Charter Hall is expected to generate 5.53 times less return on investment than Credit Clear. But when comparing it to its historical volatility, Charter Hall Retail is 3.51 times less risky than Credit Clear. It trades about 0.08 of its potential returns per unit of risk. Credit Clear is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Credit Clear on August 31, 2024 and sell it today you would earn a total of 3.00 from holding Credit Clear or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Retail vs. Credit Clear
Performance |
| Timeline |
| Charter Hall Retail |
| Credit Clear |
Charter Hall and Credit Clear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Credit Clear
The main advantage of trading using opposite Charter Hall and Credit Clear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Credit Clear 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 Credit Clear will offset losses from the drop in Credit Clear's long position.| Charter Hall vs. Dexus Convenience Retail | Charter Hall vs. Super Retail Group | Charter Hall vs. Firetail Resources | Charter Hall vs. Future Generation Global |
| Credit Clear vs. Amani Gold | Credit Clear vs. A1 Investments Resources | Credit Clear vs. Coronado Global Resources | Credit Clear vs. Hutchison Telecommunications |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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