Correlation Between Garda Diversified and Charter Hall
Can any of the company-specific risk be diversified away by investing in both Garda Diversified 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 Garda Diversified and Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garda Diversified Ppty and Charter Hall Retail, you can compare the effects of market volatilities on Garda Diversified 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 Garda Diversified with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda Diversified and Charter Hall.
Diversification Opportunities for Garda Diversified and Charter Hall
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Garda and Charter is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Garda Diversified Ppty 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 Garda Diversified 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 Garda Diversified Ppty 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 Garda Diversified i.e., Garda Diversified and Charter Hall go up and down completely randomly.
Pair Corralation between Garda Diversified and Charter Hall
Assuming the 90 days trading horizon Garda Diversified is expected to generate 6.39 times less return on investment than Charter Hall. But when comparing it to its historical volatility, Garda Diversified Ppty is 1.3 times less risky than Charter Hall. It trades about 0.0 of its potential returns per unit of risk. Charter Hall Retail is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 343.00 in Charter Hall Retail on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Charter Hall Retail or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garda Diversified Ppty vs. Charter Hall Retail
Performance |
| Timeline |
| Garda Diversified Ppty |
| Charter Hall Retail |
Garda Diversified and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garda Diversified and Charter Hall
The main advantage of trading using opposite Garda Diversified and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garda Diversified 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.| Garda Diversified vs. Australian Unity Office | Garda Diversified vs. Champion Iron | Garda Diversified vs. Ridley | Garda Diversified vs. Peel Mining |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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