Correlation Between Flagship Investments and Charter Hall
Can any of the company-specific risk be diversified away by investing in both Flagship Investments 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 Flagship Investments and Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flagship Investments and Charter Hall Retail, you can compare the effects of market volatilities on Flagship Investments 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 Flagship Investments with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flagship Investments and Charter Hall.
Diversification Opportunities for Flagship Investments and Charter Hall
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Flagship and Charter is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Flagship Investments 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 Flagship Investments 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 Flagship Investments 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 Flagship Investments i.e., Flagship Investments and Charter Hall go up and down completely randomly.
Pair Corralation between Flagship Investments and Charter Hall
Assuming the 90 days trading horizon Flagship Investments is expected to generate 1.17 times more return on investment than Charter Hall. However, Flagship Investments is 1.17 times more volatile than Charter Hall Retail. It trades about 0.07 of its potential returns per unit of risk. Charter Hall Retail is currently generating about 0.0 per unit of risk. If you would invest 175.00 in Flagship Investments on August 29, 2024 and sell it today you would earn a total of 35.00 from holding Flagship Investments or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.53% |
| Values | Daily Returns |
Flagship Investments vs. Charter Hall Retail
Performance |
| Timeline |
| Flagship Investments |
| Charter Hall Retail |
Flagship Investments and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flagship Investments and Charter Hall
The main advantage of trading using opposite Flagship Investments and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flagship Investments 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.| Flagship Investments vs. ACDC Metals | Flagship Investments vs. Health and Plant | Flagship Investments vs. Aeon Metals | Flagship Investments vs. Sky Metals |
| Charter Hall vs. Australian Unity Office | Charter Hall vs. Champion Iron | Charter Hall vs. Ridley | Charter Hall vs. Peel Mining |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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