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 Education, 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
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vicinity and Charter is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Vicinity Centres Re and Charter Hall Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Hall Education 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 Education 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 is expected to generate 1.17 times less return on investment than Charter Hall. In addition to that, Vicinity Centres is 1.07 times more volatile than Charter Hall Education. It trades about 0.05 of its total potential returns per unit of risk. Charter Hall Education is currently generating about 0.06 per unit of volatility. If you would invest 269.00 in Charter Hall Education on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Charter Hall Education or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vicinity Centres Re vs. Charter Hall Education
Performance |
| Timeline |
| Vicinity Centres |
| Charter Hall Education |
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. Bank of Queensland | Vicinity Centres vs. Commonwealth Bank of | Vicinity Centres vs. Red Hill Iron | Vicinity Centres vs. Bisalloy Steel Group |
| Charter Hall vs. Super Retail Group | Charter Hall vs. Dexus Convenience Retail | Charter Hall vs. Cleanaway Waste Management | Charter Hall vs. Regal Funds Management |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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