Correlation Between Charter Hall and Insurance Australia
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Insurance Australia 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 Insurance Australia 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 Insurance Australia Group, you can compare the effects of market volatilities on Charter Hall and Insurance Australia 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 Insurance Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Insurance Australia.
Diversification Opportunities for Charter Hall and Insurance Australia
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Charter and Insurance is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Insurance Australia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insurance Australia 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 Insurance Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insurance Australia has no effect on the direction of Charter Hall i.e., Charter Hall and Insurance Australia go up and down completely randomly.
Pair Corralation between Charter Hall and Insurance Australia
Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 0.56 times more return on investment than Insurance Australia. However, Charter Hall Retail is 1.77 times less risky than Insurance Australia. It trades about 0.14 of its potential returns per unit of risk. Insurance Australia Group is currently generating about 0.01 per unit of risk. If you would invest 307.00 in Charter Hall Retail on October 17, 2024 and sell it today you would earn a total of 7.00 from holding Charter Hall Retail or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Retail vs. Insurance Australia Group
Performance |
| Timeline |
| Charter Hall Retail |
| Insurance Australia |
Charter Hall and Insurance Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Insurance Australia
The main advantage of trading using opposite Charter Hall and Insurance Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Insurance Australia 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 Insurance Australia will offset losses from the drop in Insurance Australia's long position.| Charter Hall vs. Centrex Metals | Charter Hall vs. MetalsGrove Mining | Charter Hall vs. Carawine Resources Limited | Charter Hall vs. Aeon Metals |
| Insurance Australia vs. Retail Food Group | Insurance Australia vs. Pinnacle Investment Management | Insurance Australia vs. Charter Hall Retail | Insurance Australia vs. Viva Leisure |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |