Correlation Between Charter Hall and Imugene

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

Diversification Opportunities for Charter Hall and Imugene

0.71

Correlation Coefficient

Charter Hall  Imugene

Poor diversification

The 3 months correlation between Charter and Imugene is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Imugene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imugene 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 Imugene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imugene has no effect on the direction of Charter Hall i.e., Charter Hall and Imugene go up and down completely randomly.

Pair Corralation between Charter Hall and Imugene

Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 0.26 times more return on investment than Imugene. However, Charter Hall Retail is 3.77 times less risky than Imugene. It trades about -0.18 of its potential returns per unit of risk. Imugene is currently generating about -0.07 per unit of risk. If you would invest  366.00  in Charter Hall Retail on September 14, 2024 and sell it today you would lose (43.00) from holding Charter Hall Retail or give up 11.75% of portfolio value over 90 days.

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

Charter Hall Retail  vs.  Imugene

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.

Imugene

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Imugene 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 Imugene

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

The idea behind Charter Hall Retail and Imugene 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.