Correlation Between OOhMedia and Charter Hall
Can any of the company-specific risk be diversified away by investing in both OOhMedia 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 OOhMedia and Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between oOhMedia and Charter Hall Long, you can compare the effects of market volatilities on OOhMedia 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 OOhMedia with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of OOhMedia and Charter Hall.
Diversification Opportunities for OOhMedia and Charter Hall
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between OOhMedia and Charter is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding oOhMedia and Charter Hall Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Hall Long and OOhMedia 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 oOhMedia 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 Long has no effect on the direction of OOhMedia i.e., OOhMedia and Charter Hall go up and down completely randomly.
Pair Corralation between OOhMedia and Charter Hall
Assuming the 90 days trading horizon oOhMedia is expected to under-perform the Charter Hall. In addition to that, OOhMedia is 1.4 times more volatile than Charter Hall Long. It trades about -0.09 of its total potential returns per unit of risk. Charter Hall Long is currently generating about -0.07 per unit of volatility. If you would invest 385.00 in Charter Hall Long on September 12, 2024 and sell it today you would lose (7.00) from holding Charter Hall Long or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
oOhMedia vs. Charter Hall Long
Performance |
| Timeline |
| oOhMedia |
| Charter Hall Long |
OOhMedia and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OOhMedia and Charter Hall
The main advantage of trading using opposite OOhMedia and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OOhMedia 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.| OOhMedia vs. Aneka Tambang Tbk | OOhMedia vs. Macquarie Group | OOhMedia vs. Challenger | OOhMedia vs. BHP Group Limited |
| Charter Hall vs. Retail Food Group | Charter Hall vs. Falcon Metals | Charter Hall vs. Black Rock Mining | Charter Hall vs. Stelar Metals |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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