Correlation Between Charter Hall and Flagship Investments
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Flagship Investments 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 Flagship Investments 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 Flagship Investments, you can compare the effects of market volatilities on Charter Hall and Flagship Investments 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 Flagship Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Flagship Investments.
Diversification Opportunities for Charter Hall and Flagship Investments
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Charter and Flagship is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Flagship Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flagship Investments 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 Flagship Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flagship Investments has no effect on the direction of Charter Hall i.e., Charter Hall and Flagship Investments go up and down completely randomly.
Pair Corralation between Charter Hall and Flagship Investments
Assuming the 90 days trading horizon Charter Hall is expected to generate 14.68 times less return on investment than Flagship Investments. But when comparing it to its historical volatility, Charter Hall Retail is 1.19 times less risky than Flagship Investments. It trades about 0.02 of its potential returns per unit of risk. Flagship Investments is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 198.00 in Flagship Investments on August 29, 2024 and sell it today you would earn a total of 12.00 from holding Flagship Investments or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Charter Hall Retail vs. Flagship Investments
Performance |
| Timeline |
| Charter Hall Retail |
| Flagship Investments |
Charter Hall and Flagship Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Flagship Investments
The main advantage of trading using opposite Charter Hall and Flagship Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Flagship Investments 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 Flagship Investments will offset losses from the drop in Flagship Investments' long position.| Charter Hall vs. Australian Unity Office | Charter Hall vs. Champion Iron | Charter Hall vs. Ridley | Charter Hall vs. Peel Mining |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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