Correlation Between Stelar Metals and Charter Hall
Can any of the company-specific risk be diversified away by investing in both Stelar 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 Stelar 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 Stelar Metals and Charter Hall Retail, you can compare the effects of market volatilities on Stelar 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 Stelar Metals with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Charter Hall.
Diversification Opportunities for Stelar Metals and Charter Hall
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stelar and Charter is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Stelar 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 Stelar 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 Stelar 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 Stelar Metals i.e., Stelar Metals and Charter Hall go up and down completely randomly.
Pair Corralation between Stelar Metals and Charter Hall
Assuming the 90 days trading horizon Stelar Metals is expected to generate 4.05 times more return on investment than Charter Hall. However, Stelar Metals is 4.05 times more volatile than Charter Hall Retail. It trades about 0.02 of its potential returns per unit of risk. Charter Hall Retail is currently generating about 0.03 per unit of risk. If you would invest 6.90 in Stelar Metals on September 14, 2024 and sell it today you would lose (0.10) from holding Stelar Metals or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Charter Hall Retail
Performance |
| Timeline |
| Stelar Metals |
| Charter Hall Retail |
Stelar Metals and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Charter Hall
The main advantage of trading using opposite Stelar Metals and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar 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.| Stelar Metals vs. Northern Star Resources | Stelar Metals vs. Evolution Mining | Stelar Metals vs. Bluescope Steel | Stelar Metals vs. Sandfire Resources NL |
| Charter Hall vs. Data3 | Charter Hall vs. Aurelia Metals | Charter Hall vs. Centuria Industrial Reit | Charter Hall vs. Dug Technology |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |