Correlation Between Charter Hall and Kip McGrath
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Kip McGrath 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 Kip McGrath 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 Kip McGrath Education, you can compare the effects of market volatilities on Charter Hall and Kip McGrath 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 Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Kip McGrath.
Diversification Opportunities for Charter Hall and Kip McGrath
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Charter and Kip is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Kip McGrath Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kip McGrath Education 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 Kip McGrath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kip McGrath Education has no effect on the direction of Charter Hall i.e., Charter Hall and Kip McGrath go up and down completely randomly.
Pair Corralation between Charter Hall and Kip McGrath
Assuming the 90 days trading horizon Charter Hall is expected to generate 17.18 times less return on investment than Kip McGrath. But when comparing it to its historical volatility, Charter Hall Retail is 2.24 times less risky than Kip McGrath. It trades about 0.06 of its potential returns per unit of risk. Kip McGrath Education is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Kip McGrath Education on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Kip McGrath Education or generate 23.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Retail vs. Kip McGrath Education
Performance |
| Timeline |
| Charter Hall Retail |
| Kip McGrath Education |
Charter Hall and Kip McGrath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Kip McGrath
The main advantage of trading using opposite Charter Hall and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Kip McGrath 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 Kip McGrath will offset losses from the drop in Kip McGrath's long position.| Charter Hall vs. Leeuwin Metals | Charter Hall vs. Regis Healthcare | Charter Hall vs. DY6 Metals | Charter Hall vs. Oneview Healthcare PLC |
| Kip McGrath vs. Aneka Tambang Tbk | Kip McGrath vs. Macquarie Group | Kip McGrath vs. Macquarie Group Ltd | Kip McGrath vs. Challenger |
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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