Correlation Between Charter Hall and Sayona Mining
Can any of the company-specific risk be diversified away by investing in both Charter Hall and Sayona Mining 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 Sayona Mining 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 Sayona Mining, you can compare the effects of market volatilities on Charter Hall and Sayona Mining 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 Sayona Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Sayona Mining.
Diversification Opportunities for Charter Hall and Sayona Mining
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Charter and Sayona is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Sayona Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sayona Mining 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 Sayona Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sayona Mining has no effect on the direction of Charter Hall i.e., Charter Hall and Sayona Mining go up and down completely randomly.
Pair Corralation between Charter Hall and Sayona Mining
Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 0.21 times more return on investment than Sayona Mining. However, Charter Hall Retail is 4.81 times less risky than Sayona Mining. It trades about 0.08 of its potential returns per unit of risk. Sayona Mining is currently generating about -0.17 per unit of risk. If you would invest 307.00 in Charter Hall Retail on October 16, 2024 and sell it today you would earn a total of 4.00 from holding Charter Hall Retail or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Hall Retail vs. Sayona Mining
Performance |
| Timeline |
| Charter Hall Retail |
| Sayona Mining |
Charter Hall and Sayona Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Hall and Sayona Mining
The main advantage of trading using opposite Charter Hall and Sayona Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, Sayona Mining 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 Sayona Mining will offset losses from the drop in Sayona Mining's long position.| Charter Hall vs. Mount Gibson Iron | Charter Hall vs. Bisalloy Steel Group | Charter Hall vs. Falcon Metals | Charter Hall vs. Centrex Metals |
| Sayona Mining vs. Djerriwarrh Investments | Sayona Mining vs. BKI Investment | Sayona Mining vs. Regis Healthcare | Sayona Mining vs. Clime Investment Management |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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