Correlation Between Charter Hall and Dexus Convenience
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Dexus Convenience 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 Dexus Convenience 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 Dexus Convenience Retail, you can compare the effects of market volatilities on Charter Hall and Dexus Convenience 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 Dexus Convenience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Dexus Convenience.
Diversification Opportunities for Charter Hall and Dexus Convenience
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Charter and Dexus is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Dexus Convenience Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexus Convenience Retail 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 Dexus Convenience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexus Convenience Retail has no effect on the direction of Charter Hall i.e., Charter Hall and Dexus Convenience go up and down completely randomly.
Pair Corralation between Charter Hall and Dexus Convenience
Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 0.56 times more return on investment than Dexus Convenience. However, Charter Hall Retail is 1.79 times less risky than Dexus Convenience. It trades about 0.14 of its potential returns per unit of risk. Dexus Convenience Retail is currently generating about -0.05 per unit of risk. If you would invest 319.00 in Charter Hall Retail on November 3, 2024 and sell it today you would earn a total of 8.00 from holding Charter Hall Retail or generate 2.51% 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. Dexus Convenience Retail
Performance |
| Timeline |
| Charter Hall Retail |
| Dexus Convenience Retail |
Charter Hall and Dexus Convenience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Dexus Convenience
The main advantage of trading using opposite Charter Hall and Dexus Convenience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Dexus Convenience 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 Dexus Convenience will offset losses from the drop in Dexus Convenience's long position.| Charter Hall vs. Autosports Group | Charter Hall vs. A1 Investments Resources | Charter Hall vs. Infomedia | Charter Hall vs. Sandon Capital Investments |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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