Correlation Between Charter Hall and GDI Property
Can any of the company-specific risk be diversified away by investing in both Charter Hall and GDI 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 GDI 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 GDI Property Group, you can compare the effects of market volatilities on Charter Hall and GDI 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 GDI Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and GDI Property.
Diversification Opportunities for Charter Hall and GDI Property
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Charter and GDI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and GDI Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDI Property Group 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 GDI Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDI Property Group has no effect on the direction of Charter Hall i.e., Charter Hall and GDI Property go up and down completely randomly.
Pair Corralation between Charter Hall and GDI Property
Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 0.71 times more return on investment than GDI Property. However, Charter Hall Retail is 1.41 times less risky than GDI Property. It trades about 0.0 of its potential returns per unit of risk. GDI Property Group is currently generating about -0.01 per unit of risk. If you would invest 352.00 in Charter Hall Retail on August 24, 2024 and sell it today you would lose (12.00) from holding Charter Hall Retail or give up 3.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Retail vs. GDI Property Group
Performance |
| Timeline |
| Charter Hall Retail |
| GDI Property Group |
Charter Hall and GDI Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and GDI Property
The main advantage of trading using opposite Charter Hall and GDI Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, GDI 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 GDI Property will offset losses from the drop in GDI Property's long position.| Charter Hall vs. Scentre Group | Charter Hall vs. Vicinity Centres Re | Charter Hall vs. Cromwell Property Group | Charter Hall vs. GDI Property Group |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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