Correlation Between Charter Hall and Superior Resources
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Superior Resources 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 Superior Resources 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 Superior Resources, you can compare the effects of market volatilities on Charter Hall and Superior Resources 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 Superior Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Superior Resources.
Diversification Opportunities for Charter Hall and Superior Resources
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charter and Superior is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Superior Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Resources 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 Superior Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Resources has no effect on the direction of Charter Hall i.e., Charter Hall and Superior Resources go up and down completely randomly.
Pair Corralation between Charter Hall and Superior Resources
Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 0.15 times more return on investment than Superior Resources. However, Charter Hall Retail is 6.59 times less risky than Superior Resources. It trades about -0.07 of its potential returns per unit of risk. Superior Resources is currently generating about -0.07 per unit of risk. If you would invest 357.00 in Charter Hall Retail on September 4, 2024 and sell it today you would lose (17.00) from holding Charter Hall Retail or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Retail vs. Superior Resources
Performance |
| Timeline |
| Charter Hall Retail |
| Superior Resources |
Charter Hall and Superior Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Superior Resources
The main advantage of trading using opposite Charter Hall and Superior Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Superior Resources 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 Superior Resources will offset losses from the drop in Superior Resources' long position.| Charter Hall vs. Vicinity Centres Re | Charter Hall vs. Cromwell Property Group | Charter Hall vs. Carindale Property Trust | Charter Hall vs. Australian Unity Office |
| Superior Resources vs. Dug Technology | Superior Resources vs. Charter Hall Retail | Superior Resources vs. Dexus Convenience Retail | Superior Resources vs. Hansen Technologies |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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