Correlation Between Garda Diversified and Charter Hall

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

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

Diversification Opportunities for Garda Diversified and Charter Hall

0.06

Correlation Coefficient

Garda Diversified  Charter Hall

Significant diversification

The 3 months correlation between Garda and Charter is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Garda Diversified Ppty and Charter Hall Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Hall Education and Garda Diversified 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 Garda Diversified Ppty 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 Education has no effect on the direction of Garda Diversified i.e., Garda Diversified and Charter Hall go up and down completely randomly.

Pair Corralation between Garda Diversified and Charter Hall

Assuming the 90 days trading horizon Garda Diversified Ppty is expected to under-perform the Charter Hall. But the stock apears to be less risky and, when comparing its historical volatility, Garda Diversified Ppty is 1.35 times less risky than Charter Hall. The stock trades about -0.04 of its potential returns per unit of risk. The Charter Hall Education is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  258.00  in Charter Hall Education on December 30, 2024 and sell it today you would earn a total of  21.00  from holding Charter Hall Education or generate 8.14% return on investment over 90 days.

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

Garda Diversified Ppty  vs.  Charter Hall Education

Garda Diversified Ppty

Risk-Adjusted Performance

Very Weak

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

Charter Hall Education

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Charter Hall Education are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Charter Hall may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Garda Diversified and Charter Hall

The main advantage of trading using opposite Garda Diversified and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garda Diversified 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.

The idea behind Garda Diversified Ppty and Charter Hall Education 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.