Correlation Between Hansen Technologies and Charter Hall

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

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

Diversification Opportunities for Hansen Technologies and Charter Hall

-0.59

Correlation Coefficient

Hansen Technologies  Charter Hall

Excellent diversification

The 3 months correlation between Hansen and Charter is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hansen Technologies 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 Hansen Technologies 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 Hansen Technologies 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 Hansen Technologies i.e., Hansen Technologies and Charter Hall go up and down completely randomly.

Pair Corralation between Hansen Technologies and Charter Hall

Assuming the 90 days trading horizon Hansen Technologies is expected to generate 1.33 times more return on investment than Charter Hall. However, Hansen Technologies is 1.33 times more volatile than Charter Hall Education. It trades about 0.1 of its potential returns per unit of risk. Charter Hall Education is currently generating about 0.08 per unit of risk. If you would invest  440.00  in Hansen Technologies on October 7, 2024 and sell it today you would earn a total of  101.00  from holding Hansen Technologies or generate 22.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hansen Technologies  vs.  Charter Hall Education

Hansen Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hansen Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hansen Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Charter Hall Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Charter Hall Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Hansen Technologies and Charter Hall

The main advantage of trading using opposite Hansen Technologies and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansen Technologies 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 Hansen Technologies 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.