Correlation Between Charter Hall and Sandon Capital
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Sandon Capital 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 Sandon Capital 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 Sandon Capital Investments, you can compare the effects of market volatilities on Charter Hall and Sandon Capital 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 Sandon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Sandon Capital.
Diversification Opportunities for Charter Hall and Sandon Capital
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Charter and Sandon is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Sandon Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandon Capital Inves 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 Sandon Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandon Capital Inves has no effect on the direction of Charter Hall i.e., Charter Hall and Sandon Capital go up and down completely randomly.
Pair Corralation between Charter Hall and Sandon Capital
Assuming the 90 days trading horizon Charter Hall is expected to generate 72.6 times less return on investment than Sandon Capital. But when comparing it to its historical volatility, Charter Hall Retail is 1.45 times less risky than Sandon Capital. It trades about 0.0 of its potential returns per unit of risk. Sandon Capital Investments is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 59.00 in Sandon Capital Investments on August 26, 2024 and sell it today you would earn a total of 19.00 from holding Sandon Capital Investments or generate 32.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Charter Hall Retail vs. Sandon Capital Investments
Performance |
| Timeline |
| Charter Hall Retail |
| Sandon Capital Inves |
Charter Hall and Sandon Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Sandon Capital
The main advantage of trading using opposite Charter Hall and Sandon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Sandon Capital 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 Sandon Capital will offset losses from the drop in Sandon Capital's long position.| Charter Hall vs. Perpetual Credit Income | Charter Hall vs. Dug Technology | Charter Hall vs. Richmond Vanadium Technology | Charter Hall vs. Air New Zealand |
| Sandon Capital vs. Cleanaway Waste Management | Sandon Capital vs. Hudson Investment Group | Sandon Capital vs. Kip McGrath Education | Sandon Capital vs. Argo 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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