Correlation Between Charter Hall and Sims
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Sims 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 Sims 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 Sims, you can compare the effects of market volatilities on Charter Hall and Sims 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 Sims. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Sims.
Diversification Opportunities for Charter Hall and Sims
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Charter and Sims is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Sims in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sims 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 Sims. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sims has no effect on the direction of Charter Hall i.e., Charter Hall and Sims go up and down completely randomly.
Pair Corralation between Charter Hall and Sims
Assuming the 90 days trading horizon Charter Hall Retail is expected to under-perform the Sims. But the stock apears to be less risky and, when comparing its historical volatility, Charter Hall Retail is 1.7 times less risky than Sims. The stock trades about -0.19 of its potential returns per unit of risk. The Sims is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,300 in Sims on September 13, 2024 and sell it today you would lose (10.00) from holding Sims or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Retail vs. Sims
Performance |
| Timeline |
| Charter Hall Retail |
| Sims |
Charter Hall and Sims Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Sims
The main advantage of trading using opposite Charter Hall and Sims positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Sims 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 Sims will offset losses from the drop in Sims' long position.| Charter Hall vs. Pinnacle Investment Management | Charter Hall vs. Skycity Entertainment Group | Charter Hall vs. BKI Investment | Charter Hall vs. Beston Global Food |
| Sims vs. Fisher Paykel Healthcare | Sims vs. Ramsay Health Care | Sims vs. COAST ENTERTAINMENT HOLDINGS | Sims vs. Charter Hall Retail |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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