Correlation Between Charter Hall and Ainsworth Game

Can any of the company-specific risk be diversified away by investing in both Charter Hall and Ainsworth Game 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 Ainsworth Game 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 Ainsworth Game Technology, you can compare the effects of market volatilities on Charter Hall and Ainsworth Game 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 Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Hall and Ainsworth Game.

Diversification Opportunities for Charter Hall and Ainsworth Game

0.69

Correlation Coefficient

Charter Hall  Ainsworth Game

Poor diversification

The 3 months correlation between Charter and Ainsworth is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Ainsworth Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainsworth Game Technology 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 Ainsworth Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainsworth Game Technology has no effect on the direction of Charter Hall i.e., Charter Hall and Ainsworth Game go up and down completely randomly.

Pair Corralation between Charter Hall and Ainsworth Game

Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 0.39 times more return on investment than Ainsworth Game. However, Charter Hall Retail is 2.56 times less risky than Ainsworth Game. It trades about 0.02 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about -0.02 per unit of risk. If you would invest  323.00  in Charter Hall Retail on August 29, 2024 and sell it today you would earn a total of  25.00  from holding Charter Hall Retail or generate 7.74% return on investment over 90 days.

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

Charter Hall Retail  vs.  Ainsworth Game Technology

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 comparatively stable basic indicators, Charter Hall is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Ainsworth Game Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ainsworth Game Technology 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 forward indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Charter Hall and Ainsworth Game

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

The idea behind Charter Hall Retail and Ainsworth Game Technology 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.