Correlation Between Charter Hall and Kingsrose Mining
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Kingsrose Mining 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 Kingsrose Mining 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 Kingsrose Mining, you can compare the effects of market volatilities on Charter Hall and Kingsrose Mining 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 Kingsrose Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Kingsrose Mining.
Diversification Opportunities for Charter Hall and Kingsrose Mining
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Charter and Kingsrose is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Kingsrose Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsrose Mining 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 Kingsrose Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsrose Mining has no effect on the direction of Charter Hall i.e., Charter Hall and Kingsrose Mining go up and down completely randomly.
Pair Corralation between Charter Hall and Kingsrose Mining
Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 0.19 times more return on investment than Kingsrose Mining. However, Charter Hall Retail is 5.18 times less risky than Kingsrose Mining. It trades about 0.08 of its potential returns per unit of risk. Kingsrose Mining is currently generating about -0.04 per unit of risk. If you would invest 340.00 in Charter Hall Retail on August 31, 2024 and sell it today you would earn a total of 6.00 from holding Charter Hall Retail or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Charter Hall Retail vs. Kingsrose Mining
Performance |
| Timeline |
| Charter Hall Retail |
| Kingsrose Mining |
Charter Hall and Kingsrose Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Kingsrose Mining
The main advantage of trading using opposite Charter Hall and Kingsrose Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Kingsrose Mining 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 Kingsrose Mining will offset losses from the drop in Kingsrose Mining's long position.| Charter Hall vs. Dexus Convenience Retail | Charter Hall vs. Super Retail Group | Charter Hall vs. Firetail Resources | Charter Hall vs. Future Generation Global |
| Kingsrose Mining vs. Auctus Alternative Investments | Kingsrose Mining vs. TTG Fintech | Kingsrose Mining vs. Australian Unity Office | Kingsrose Mining vs. Super Retail Group |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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