Correlation Between Super Retail and Charter Hall
Can any of the company-specific risk be diversified away by investing in both Super Retail 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 Super Retail and Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Super Retail Group and Charter Hall Retail, you can compare the effects of market volatilities on Super Retail 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 Super Retail with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Charter Hall.
Diversification Opportunities for Super Retail and Charter Hall
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Super and Charter is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group 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 Super Retail 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 Super Retail Group 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 Super Retail i.e., Super Retail and Charter Hall go up and down completely randomly.
Pair Corralation between Super Retail and Charter Hall
Assuming the 90 days trading horizon Super Retail Group is expected to generate 1.42 times more return on investment than Charter Hall. However, Super Retail is 1.42 times more volatile than Charter Hall Retail. It trades about 0.0 of its potential returns per unit of risk. Charter Hall Retail is currently generating about 0.0 per unit of risk. If you would invest 1,528 in Super Retail Group on August 29, 2024 and sell it today you would lose (53.00) from holding Super Retail Group or give up 3.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.53% |
| Values | Daily Returns |
Super Retail Group vs. Charter Hall Retail
Performance |
| Timeline |
| Super Retail Group |
| Charter Hall Retail |
Super Retail and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Charter Hall
The main advantage of trading using opposite Super Retail and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail 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.| Super Retail vs. Readytech Holdings | Super Retail vs. IDP Education | Super Retail vs. Richmond Vanadium Technology | Super Retail vs. Kip McGrath Education |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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