Correlation Between Charter Hall and Commonwealth Bank

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

Diversification Opportunities for Charter Hall and Commonwealth Bank

0.05

Correlation Coefficient

Charter Hall  Commonwealth Bank

Significant diversification

The 3 months correlation between Charter and Commonwealth is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Charter Hall Retail and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank 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 Commonwealth Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Bank has no effect on the direction of Charter Hall i.e., Charter Hall and Commonwealth Bank go up and down completely randomly.

Pair Corralation between Charter Hall and Commonwealth Bank

Assuming the 90 days trading horizon Charter Hall Retail is expected to generate 2.17 times more return on investment than Commonwealth Bank. However, Charter Hall is 2.17 times more volatile than Commonwealth Bank of. It trades about 0.12 of its potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.07 per unit of risk. If you would invest  361.00  in Charter Hall Retail on April 25, 2025 and sell it today you would earn a total of  24.00  from holding Charter Hall Retail or generate 6.65% return on investment over 90 days.

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

Charter Hall Retail  vs.  Commonwealth Bank of

Charter Hall Retail

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Charter Hall Retail are ranked lower than 9 (%) 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 August 2025.

Commonwealth Bank

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Commonwealth Bank of are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Commonwealth Bank is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Charter Hall and Commonwealth Bank

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

The idea behind Charter Hall Retail and Commonwealth Bank of 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.