Correlation Between Insignia Financial and Charter Hall
Can any of the company-specific risk be diversified away by investing in both Insignia 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 Insignia 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 Insignia Financial and Charter Hall Retail, you can compare the effects of market volatilities on Insignia 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 Insignia Financial with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insignia Financial and Charter Hall.
Diversification Opportunities for Insignia Financial and Charter Hall
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Insignia and Charter is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Financial 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 Insignia 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 Insignia Financial 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 Insignia Financial i.e., Insignia Financial and Charter Hall go up and down completely randomly.
Pair Corralation between Insignia Financial and Charter Hall
Assuming the 90 days trading horizon Insignia Financial is expected to under-perform the Charter Hall. In addition to that, Insignia Financial is 1.73 times more volatile than Charter Hall Retail. It trades about -0.13 of its total potential returns per unit of risk. Charter Hall Retail is currently generating about 0.06 per unit of volatility. If you would invest 339.00 in Charter Hall Retail on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Charter Hall Retail or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insignia Financial vs. Charter Hall Retail
Performance |
| Timeline |
| Insignia Financial |
| Charter Hall Retail |
Insignia Financial and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insignia Financial and Charter Hall
The main advantage of trading using opposite Insignia Financial and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insignia 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.| Insignia Financial vs. Retail Food Group | Insignia Financial vs. Clime Investment Management | Insignia Financial vs. Diversified United Investment | Insignia Financial vs. Duxton Broadacre Farms |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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