Correlation Between Charter Hall and Scentre
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Scentre 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 Scentre 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 Scentre Group, you can compare the effects of market volatilities on Charter Hall and Scentre 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 Scentre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Scentre.
Diversification Opportunities for Charter Hall and Scentre
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Charter and Scentre is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Scentre Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scentre Group 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 Scentre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scentre Group has no effect on the direction of Charter Hall i.e., Charter Hall and Scentre go up and down completely randomly.
Pair Corralation between Charter Hall and Scentre
Assuming the 90 days trading horizon Charter Hall Retail is expected to under-perform the Scentre. But the stock apears to be less risky and, when comparing its historical volatility, Charter Hall Retail is 1.01 times less risky than Scentre. The stock trades about -0.08 of its potential returns per unit of risk. The Scentre Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 362.00 in Scentre Group on October 31, 2024 and sell it today you would earn a total of 3.00 from holding Scentre Group or generate 0.83% 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. Scentre Group
Performance |
| Timeline |
| Charter Hall Retail |
| Scentre Group |
Charter Hall and Scentre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Scentre
The main advantage of trading using opposite Charter Hall and Scentre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Scentre 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 Scentre will offset losses from the drop in Scentre's long position.| Charter Hall vs. Alternative Investment Trust | Charter Hall vs. National Storage REIT | Charter Hall vs. Pinnacle Investment Management | Charter Hall vs. Hudson Investment Group |
| Scentre vs. COAST ENTERTAINMENT HOLDINGS | Scentre vs. Nine Entertainment Co | Scentre vs. Flagship Investments | Scentre vs. Sandon Capital Investments |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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