Correlation Between Infomedia and Charter Hall
Can any of the company-specific risk be diversified away by investing in both Infomedia 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 Infomedia and Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infomedia and Charter Hall Retail, you can compare the effects of market volatilities on Infomedia 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 Infomedia with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infomedia and Charter Hall.
Diversification Opportunities for Infomedia and Charter Hall
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Infomedia and Charter is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Infomedia 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 Infomedia 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 Infomedia 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 Infomedia i.e., Infomedia and Charter Hall go up and down completely randomly.
Pair Corralation between Infomedia and Charter Hall
Assuming the 90 days trading horizon Infomedia is expected to generate 1.89 times more return on investment than Charter Hall. However, Infomedia is 1.89 times more volatile than Charter Hall Retail. It trades about 0.03 of its potential returns per unit of risk. Charter Hall Retail is currently generating about 0.01 per unit of risk. If you would invest 106.00 in Infomedia on September 3, 2024 and sell it today you would earn a total of 28.00 from holding Infomedia or generate 26.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infomedia vs. Charter Hall Retail
Performance |
| Timeline |
| Infomedia |
| Charter Hall Retail |
Infomedia and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infomedia and Charter Hall
The main advantage of trading using opposite Infomedia and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infomedia 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.| Infomedia vs. Commonwealth Bank | Infomedia vs. Commonwealth Bank of | Infomedia vs. Champion Iron | Infomedia vs. iShares Global Healthcare |
| Charter Hall vs. GDI Property Group | Charter Hall vs. Champion Iron | Charter Hall vs. iShares Global Healthcare | 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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