Correlation Between Sky Metals and Charter Hall
Can any of the company-specific risk be diversified away by investing in both Sky Metals 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 Sky Metals and Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sky Metals and Charter Hall Retail, you can compare the effects of market volatilities on Sky Metals 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 Sky Metals with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sky Metals and Charter Hall.
Diversification Opportunities for Sky Metals and Charter Hall
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sky and Charter is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sky Metals 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 Sky Metals 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 Sky Metals 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 Sky Metals i.e., Sky Metals and Charter Hall go up and down completely randomly.
Pair Corralation between Sky Metals and Charter Hall
Assuming the 90 days trading horizon Sky Metals is expected to generate 4.23 times more return on investment than Charter Hall. However, Sky Metals is 4.23 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 5.00 in Sky Metals on August 30, 2024 and sell it today you would earn a total of 0.30 from holding Sky Metals or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.79% |
| Values | Daily Returns |
Sky Metals vs. Charter Hall Retail
Performance |
| Timeline |
| Sky Metals |
| Charter Hall Retail |
Sky Metals and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sky Metals and Charter Hall
The main advantage of trading using opposite Sky Metals and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sky Metals 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.| Sky Metals vs. Northern Star Resources | Sky Metals vs. Evolution Mining | Sky Metals vs. Bluescope Steel | Sky Metals vs. Sandfire Resources NL |
| Charter Hall vs. Australian Unity Office | Charter Hall vs. Champion Iron | Charter Hall vs. Ridley | 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |