Correlation Between Charter Hall and Nufarm Finance
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Nufarm Finance 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 Nufarm Finance 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 Nufarm Finance NZ, you can compare the effects of market volatilities on Charter Hall and Nufarm Finance 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 Nufarm Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Nufarm Finance.
Diversification Opportunities for Charter Hall and Nufarm Finance
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Charter and Nufarm is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Nufarm Finance NZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm Finance NZ 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 Nufarm Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm Finance NZ has no effect on the direction of Charter Hall i.e., Charter Hall and Nufarm Finance go up and down completely randomly.
Pair Corralation between Charter Hall and Nufarm Finance
Assuming the 90 days trading horizon Charter Hall Retail is expected to under-perform the Nufarm Finance. In addition to that, Charter Hall is 1.64 times more volatile than Nufarm Finance NZ. It trades about -0.01 of its total potential returns per unit of risk. Nufarm Finance NZ is currently generating about 0.04 per unit of volatility. If you would invest 8,486 in Nufarm Finance NZ on September 14, 2024 and sell it today you would earn a total of 674.00 from holding Nufarm Finance NZ or generate 7.94% 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. Nufarm Finance NZ
Performance |
| Timeline |
| Charter Hall Retail |
| Nufarm Finance NZ |
Charter Hall and Nufarm Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Nufarm Finance
The main advantage of trading using opposite Charter Hall and Nufarm Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Nufarm Finance 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 Nufarm Finance will offset losses from the drop in Nufarm Finance's long position.| Charter Hall vs. Data3 | Charter Hall vs. Aurelia Metals | Charter Hall vs. Centuria Industrial Reit | Charter Hall vs. Dug Technology |
| Nufarm Finance vs. Australian Unity Office | Nufarm Finance vs. Leeuwin Metals | Nufarm Finance vs. Catalyst Metals | Nufarm Finance vs. Group 6 Metals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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