Correlation Between Global Health and Charter Hall
Can any of the company-specific risk be diversified away by investing in both Global Health 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 Global Health and Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Health and Charter Hall Retail, you can compare the effects of market volatilities on Global Health 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 Global Health with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Health and Charter Hall.
Diversification Opportunities for Global Health and Charter Hall
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Charter is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Global Health 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 Global Health 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 Global Health 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 Global Health i.e., Global Health and Charter Hall go up and down completely randomly.
Pair Corralation between Global Health and Charter Hall
Assuming the 90 days trading horizon Global Health is expected to generate 2.98 times more return on investment than Charter Hall. However, Global Health is 2.98 times more volatile than Charter Hall Retail. It trades about 0.02 of its potential returns per unit of risk. Charter Hall Retail is currently generating about -0.16 per unit of risk. If you would invest 14.00 in Global Health on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Global Health or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Health vs. Charter Hall Retail
Performance |
| Timeline |
| Global Health |
| Charter Hall Retail |
Global Health and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Health and Charter Hall
The main advantage of trading using opposite Global Health and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Health 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.| Global Health vs. PVW Resources | Global Health vs. Woolworths | Global Health vs. Wesfarmers | Global Health vs. Ramsay Health Care |
| Charter Hall vs. Data3 | Charter Hall vs. Aurelia Metals | Charter Hall vs. Centuria Industrial Reit | Charter Hall vs. Dug Technology |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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