Correlation Between Charter Hall and Dicker Data

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

Diversification Opportunities for Charter Hall and Dicker Data

0.65

Correlation Coefficient

Charter Hall  Dicker Data

Poor diversification

The 3 months correlation between Charter and Dicker is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Dicker Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dicker Data 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 Dicker Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dicker Data has no effect on the direction of Charter Hall i.e., Charter Hall and Dicker Data go up and down completely randomly.

Pair Corralation between Charter Hall and Dicker Data

Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 0.54 times more return on investment than Dicker Data. However, Charter Hall Retail is 1.86 times less risky than Dicker Data. It trades about 0.17 of its potential returns per unit of risk. Dicker Data is currently generating about 0.0 per unit of risk. If you would invest  313.00  in Charter Hall Retail on December 22, 2024 and sell it today you would earn a total of  34.00  from holding Charter Hall Retail or generate 10.86% 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.  Dicker Data

Charter Hall Retail

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Charter Hall Retail are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Charter Hall may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Dicker Data

Risk-Adjusted Performance

Weak

Over the last 90 days Dicker Data has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Dicker Data is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Charter Hall and Dicker Data

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

The idea behind Charter Hall Retail and Dicker Data 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.