Correlation Between DMC Mining and Charter Hall
Can any of the company-specific risk be diversified away by investing in both DMC Mining and Charter Hall 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 DMC Mining and Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DMC Mining and Charter Hall Retail, you can compare the effects of market volatilities on DMC Mining and Charter Hall 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 DMC Mining with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMC Mining and Charter Hall.
Diversification Opportunities for DMC Mining and Charter Hall
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DMC and Charter is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DMC Mining and Charter Hall Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Hall Retail and DMC Mining 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 DMC Mining are associated (or correlated) with Charter Hall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Hall Retail has no effect on the direction of DMC Mining i.e., DMC Mining and Charter Hall go up and down completely randomly.
Pair Corralation between DMC Mining and Charter Hall
Assuming the 90 days trading horizon DMC Mining is expected to under-perform the Charter Hall. In addition to that, DMC Mining is 2.22 times more volatile than Charter Hall Retail. It trades about -0.04 of its total potential returns per unit of risk. Charter Hall Retail is currently generating about 0.0 per unit of volatility. If you would invest 351.00 in Charter Hall Retail on September 4, 2024 and sell it today you would lose (11.00) from holding Charter Hall Retail or give up 3.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 92.18% |
| Values | Daily Returns |
DMC Mining vs. Charter Hall Retail
Performance |
| Timeline |
| DMC Mining |
| Charter Hall Retail |
DMC Mining and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DMC Mining and Charter Hall
The main advantage of trading using opposite DMC Mining and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMC Mining position performs unexpectedly, Charter Hall 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 Charter Hall will offset losses from the drop in Charter Hall's long position.| DMC Mining vs. Northern Star Resources | DMC Mining vs. Evolution Mining | DMC Mining vs. Bluescope Steel | DMC Mining vs. Sandfire Resources NL |
| Charter Hall vs. Scentre Group | Charter Hall vs. Vicinity Centres Re | Charter Hall vs. Cromwell Property Group | Charter Hall vs. Carindale Property Trust |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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