Correlation Between Charter Hall and DMC Mining
Can any of the company-specific risk be diversified away by investing in both Charter Hall and DMC Mining 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 DMC Mining 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 DMC Mining, you can compare the effects of market volatilities on Charter Hall and DMC Mining 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 DMC Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and DMC Mining.
Diversification Opportunities for Charter Hall and DMC Mining
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Charter and DMC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and DMC Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DMC Mining 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 DMC Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DMC Mining has no effect on the direction of Charter Hall i.e., Charter Hall and DMC Mining go up and down completely randomly.
Pair Corralation between Charter Hall and DMC Mining
Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 0.45 times more return on investment than DMC Mining. However, Charter Hall Retail is 2.22 times less risky than DMC Mining. It trades about 0.0 of its potential returns per unit of risk. DMC Mining is currently generating about -0.04 per unit of risk. If you would invest 351.00 in Charter Hall Retail on September 4, 2024 and sell it today you would lose (11.00) from holding Charter Hall Retail or give up 3.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 92.18% |
| Values | Daily Returns |
Charter Hall Retail vs. DMC Mining
Performance |
| Timeline |
| Charter Hall Retail |
| DMC Mining |
Charter Hall and DMC Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and DMC Mining
The main advantage of trading using opposite Charter Hall and DMC Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, DMC Mining 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 DMC Mining will offset losses from the drop in DMC Mining'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 |
| DMC Mining vs. Northern Star Resources | DMC Mining vs. Evolution Mining | DMC Mining vs. Bluescope Steel | DMC Mining vs. Sandfire Resources NL |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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