Correlation Between Charter Hall and Carindale Property
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Carindale Property 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 Carindale Property 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 Carindale Property Trust, you can compare the effects of market volatilities on Charter Hall and Carindale Property 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 Carindale Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Carindale Property.
Diversification Opportunities for Charter Hall and Carindale Property
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Charter and Carindale is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Carindale Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carindale Property Trust 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 Carindale Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carindale Property Trust has no effect on the direction of Charter Hall i.e., Charter Hall and Carindale Property go up and down completely randomly.
Pair Corralation between Charter Hall and Carindale Property
Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 0.66 times more return on investment than Carindale Property. However, Charter Hall Retail is 1.52 times less risky than Carindale Property. It trades about 0.26 of its potential returns per unit of risk. Carindale Property Trust is currently generating about 0.06 per unit of risk. If you would invest 340.00 in Charter Hall Retail on December 27, 2024 and sell it today you would earn a total of 17.00 from holding Charter Hall Retail or generate 5.0% 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 Retail vs. Carindale Property Trust
Performance |
| Timeline |
| Charter Hall Retail |
| Carindale Property Trust |
Charter Hall and Carindale Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Carindale Property
The main advantage of trading using opposite Charter Hall and Carindale Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Carindale Property 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 Carindale Property will offset losses from the drop in Carindale Property's long position.| Charter Hall vs. Insurance Australia Group | Charter Hall vs. Genetic Technologies | Charter Hall vs. Hutchison Telecommunications | Charter Hall vs. BSP Financial Group |
| Carindale Property vs. Dug Technology | Carindale Property vs. Retail Food Group | Carindale Property vs. Charter Hall Retail | Carindale Property vs. EVE Health Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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