Correlation Between Kip McGrath and Charter Hall
Can any of the company-specific risk be diversified away by investing in both Kip McGrath 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 Kip McGrath and Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kip McGrath Education and Charter Hall Education, you can compare the effects of market volatilities on Kip McGrath 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 Kip McGrath with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kip McGrath and Charter Hall.
Diversification Opportunities for Kip McGrath and Charter Hall
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kip and Charter is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and Charter Hall Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Hall Education and Kip McGrath 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 Kip McGrath Education 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 Education has no effect on the direction of Kip McGrath i.e., Kip McGrath and Charter Hall go up and down completely randomly.
Pair Corralation between Kip McGrath and Charter Hall
Assuming the 90 days trading horizon Kip McGrath Education is expected to under-perform the Charter Hall. In addition to that, Kip McGrath is 2.45 times more volatile than Charter Hall Education. It trades about -0.01 of its total potential returns per unit of risk. Charter Hall Education is currently generating about -0.01 per unit of volatility. If you would invest 302.00 in Charter Hall Education on November 5, 2024 and sell it today you would lose (42.00) from holding Charter Hall Education or give up 13.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kip McGrath Education vs. Charter Hall Education
Performance |
| Timeline |
| Kip McGrath Education |
| Charter Hall Education |
Kip McGrath and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kip McGrath and Charter Hall
The main advantage of trading using opposite Kip McGrath and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kip McGrath 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.| Kip McGrath vs. Dalaroo Metals | Kip McGrath vs. Black Rock Mining | Kip McGrath vs. ACDC Metals | Kip McGrath vs. Perseus Mining |
| Charter Hall vs. AiMedia Technologies | Charter Hall vs. Duxton Broadacre Farms | Charter Hall vs. Diversified United Investment | Charter Hall vs. Seven West Media |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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