Correlation Between Charter Hall and Origin Energy
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Origin Energy 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 Origin Energy 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 Origin Energy, you can compare the effects of market volatilities on Charter Hall and Origin Energy 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 Origin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Origin Energy.
Diversification Opportunities for Charter Hall and Origin Energy
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Charter and Origin is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Origin Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Energy 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 Origin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Energy has no effect on the direction of Charter Hall i.e., Charter Hall and Origin Energy go up and down completely randomly.
Pair Corralation between Charter Hall and Origin Energy
Assuming the 90 days trading horizon Charter Hall is expected to generate 5.22 times less return on investment than Origin Energy. But when comparing it to its historical volatility, Charter Hall Retail is 1.02 times less risky than Origin Energy. It trades about 0.1 of its potential returns per unit of risk. Origin Energy is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 972.00 in Origin Energy on September 2, 2024 and sell it today you would earn a total of 115.00 from holding Origin Energy or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Retail vs. Origin Energy
Performance |
| Timeline |
| Charter Hall Retail |
| Origin Energy |
Charter Hall and Origin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Origin Energy
The main advantage of trading using opposite Charter Hall and Origin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Origin Energy 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 Origin Energy will offset losses from the drop in Origin Energy's long position.| Charter Hall vs. Scentre Group | Charter Hall vs. Vicinity Centres Re | Charter Hall vs. Cromwell Property Group | Charter Hall vs. GDI Property Group |
| Origin Energy vs. Hotel Property Investments | Origin Energy vs. A1 Investments Resources | Origin Energy vs. Charter Hall Retail | Origin Energy vs. Regal Investment |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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