Correlation Between Vicinity Centres and Charter Hall
Can any of the company-specific risk be diversified away by investing in both Vicinity Centres 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 Vicinity Centres and Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vicinity Centres Re and Charter Hall Long, you can compare the effects of market volatilities on Vicinity Centres 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 Vicinity Centres with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vicinity Centres and Charter Hall.
Diversification Opportunities for Vicinity Centres and Charter Hall
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vicinity and Charter is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Vicinity Centres Re 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 Vicinity Centres 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 Vicinity Centres Re 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 Vicinity Centres i.e., Vicinity Centres and Charter Hall go up and down completely randomly.
Pair Corralation between Vicinity Centres and Charter Hall
Assuming the 90 days trading horizon Vicinity Centres Re is expected to generate 0.94 times more return on investment than Charter Hall. However, Vicinity Centres Re is 1.07 times less risky than Charter Hall. It trades about 0.04 of its potential returns per unit of risk. Charter Hall Long is currently generating about 0.0 per unit of risk. If you would invest 177.00 in Vicinity Centres Re on November 2, 2024 and sell it today you would earn a total of 44.00 from holding Vicinity Centres Re or generate 24.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vicinity Centres Re vs. Charter Hall Long
Performance |
| Timeline |
| Vicinity Centres |
| Charter Hall Long |
Vicinity Centres and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vicinity Centres and Charter Hall
The main advantage of trading using opposite Vicinity Centres and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicinity Centres 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.| Vicinity Centres vs. Sports Entertainment Group | Vicinity Centres vs. Skycity Entertainment Group | Vicinity Centres vs. ARN Media Limited | Vicinity Centres vs. AiMedia Technologies |
| Charter Hall vs. Westpac Banking | Charter Hall vs. Oceania Healthcare | Charter Hall vs. Sonic Healthcare | Charter Hall vs. Kkr Credit Income |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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