Correlation Between Charter Hall and MetalsGrove Mining

Can any of the company-specific risk be diversified away by investing in both Charter Hall and MetalsGrove Mining 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 Charter Hall and MetalsGrove Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Charter Hall Retail and MetalsGrove Mining, you can compare the effects of market volatilities on Charter Hall and MetalsGrove Mining 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 Charter Hall with a short position of MetalsGrove Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and MetalsGrove Mining.

Diversification Opportunities for Charter Hall and MetalsGrove Mining

0.88

Correlation Coefficient

Charter Hall  MetalsGrove Mining

Very poor diversification

The 3 months correlation between Charter and MetalsGrove is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and MetalsGrove Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetalsGrove Mining and Charter Hall 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 Charter Hall Retail are associated (or correlated) with MetalsGrove Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetalsGrove Mining has no effect on the direction of Charter Hall i.e., Charter Hall and MetalsGrove Mining go up and down completely randomly.

Pair Corralation between Charter Hall and MetalsGrove Mining

Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 0.19 times more return on investment than MetalsGrove Mining. However, Charter Hall Retail is 5.18 times less risky than MetalsGrove Mining. It trades about 0.01 of its potential returns per unit of risk. MetalsGrove Mining is currently generating about 0.0 per unit of risk. If you would invest  316.00  in Charter Hall Retail on September 30, 2024 and sell it today you would earn a total of  3.00  from holding Charter Hall Retail or generate 0.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Charter Hall Retail  vs.  MetalsGrove Mining

Charter Hall Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Charter Hall Retail has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

MetalsGrove Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MetalsGrove Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Charter Hall and MetalsGrove Mining

The main advantage of trading using opposite Charter Hall and MetalsGrove Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Hall position performs unexpectedly, MetalsGrove Mining 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 MetalsGrove Mining will offset losses from the drop in MetalsGrove Mining's long position.

The idea behind Charter Hall Retail and MetalsGrove Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.