Correlation Between BKI Investment and Charter Hall
Can any of the company-specific risk be diversified away by investing in both BKI Investment 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 BKI Investment and Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and Charter Hall Retail, you can compare the effects of market volatilities on BKI Investment 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 BKI Investment with a short position of Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Charter Hall.
Diversification Opportunities for BKI Investment and Charter Hall
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BKI and Charter is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment 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 BKI Investment 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 BKI Investment 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 BKI Investment i.e., BKI Investment and Charter Hall go up and down completely randomly.
Pair Corralation between BKI Investment and Charter Hall
Assuming the 90 days trading horizon BKI Investment is expected to generate 0.59 times more return on investment than Charter Hall. However, BKI Investment is 1.69 times less risky than Charter Hall. It trades about 0.0 of its potential returns per unit of risk. Charter Hall Retail is currently generating about -0.18 per unit of risk. If you would invest 171.00 in BKI Investment on September 13, 2024 and sell it today you would earn a total of 0.00 from holding BKI Investment or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BKI Investment vs. Charter Hall Retail
Performance |
Timeline |
BKI Investment |
Charter Hall Retail |
BKI Investment and Charter Hall Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BKI Investment and Charter Hall
The main advantage of trading using opposite BKI Investment and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment 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.BKI Investment vs. Australian Foundation Investment | BKI Investment vs. MFF Capital Investments | BKI Investment vs. Metrics Master Income | BKI Investment vs. L1 Long Short |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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