Correlation Between EP Financial and Charter Hall
Can any of the company-specific risk be diversified away by investing in both EP Financial 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 EP Financial and Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EP Financial Group and Charter Hall Retail, you can compare the effects of market volatilities on EP Financial 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 EP Financial with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of EP Financial and Charter Hall.
Diversification Opportunities for EP Financial and Charter Hall
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EP1 and Charter is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding EP Financial Group 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 EP Financial 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 EP Financial Group 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 EP Financial i.e., EP Financial and Charter Hall go up and down completely randomly.
Pair Corralation between EP Financial and Charter Hall
Assuming the 90 days trading horizon EP Financial Group is expected to generate 2.63 times more return on investment than Charter Hall. However, EP Financial is 2.63 times more volatile than Charter Hall Retail. It trades about 0.15 of its potential returns per unit of risk. Charter Hall Retail is currently generating about 0.06 per unit of risk. If you would invest 48.00 in EP Financial Group on September 1, 2024 and sell it today you would earn a total of 4.00 from holding EP Financial Group or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EP Financial Group vs. Charter Hall Retail
Performance |
| Timeline |
| EP Financial Group |
| Charter Hall Retail |
EP Financial and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EP Financial and Charter Hall
The main advantage of trading using opposite EP Financial and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EP Financial 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.| EP Financial vs. Navigator Global Investments | EP Financial vs. Collins Foods | EP Financial vs. Hotel Property Investments | EP Financial vs. Queste Communications |
| Charter Hall vs. Leeuwin Metals | Charter Hall vs. Regis Healthcare | Charter Hall vs. DY6 Metals | Charter Hall vs. Oneview Healthcare PLC |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |