Correlation Between Charter Hall and Nine Entertainment
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Nine Entertainment 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 Nine Entertainment 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 Nine Entertainment Co, you can compare the effects of market volatilities on Charter Hall and Nine Entertainment 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 Nine Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Nine Entertainment.
Diversification Opportunities for Charter Hall and Nine Entertainment
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charter and Nine is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment 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 Nine Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Entertainment has no effect on the direction of Charter Hall i.e., Charter Hall and Nine Entertainment go up and down completely randomly.
Pair Corralation between Charter Hall and Nine Entertainment
Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 0.7 times more return on investment than Nine Entertainment. However, Charter Hall Retail is 1.42 times less risky than Nine Entertainment. It trades about 0.01 of its potential returns per unit of risk. Nine Entertainment Co is currently generating about -0.09 per unit of risk. If you would invest 339.00 in Charter Hall Retail on September 3, 2024 and sell it today you would earn a total of 4.00 from holding Charter Hall Retail or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Retail vs. Nine Entertainment Co
Performance |
| Timeline |
| Charter Hall Retail |
| Nine Entertainment |
Charter Hall and Nine Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Nine Entertainment
The main advantage of trading using opposite Charter Hall and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Nine Entertainment 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 Nine Entertainment will offset losses from the drop in Nine Entertainment's long position.| Charter Hall vs. GDI Property Group | Charter Hall vs. Australian Unity Office | Charter Hall vs. Champion Iron | Charter Hall vs. iShares Global Healthcare |
| Nine Entertainment vs. Encounter Resources | Nine Entertainment vs. Tlou Energy | Nine Entertainment vs. Superior Resources | Nine Entertainment vs. Peel Mining |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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