Correlation Between Allan Gray and CoreShares TotalWldStock

Can any of the company-specific risk be diversified away by investing in both Allan Gray and CoreShares TotalWldStock 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 Allan Gray and CoreShares TotalWldStock into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allan Gray Equity and CoreShares TotalWldStock ETF, you can compare the effects of market volatilities on Allan Gray and CoreShares TotalWldStock 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 Allan Gray with a short position of CoreShares TotalWldStock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allan Gray and CoreShares TotalWldStock.

Diversification Opportunities for Allan Gray and CoreShares TotalWldStock

0.0

Correlation Coefficient

Allan Gray  CoreShares TotalWldStock

Pay attention - limited upside

The 3 months correlation between Allan and CoreShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Allan Gray Equity and CoreShares TotalWldStock ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreShares TotalWldStock and Allan Gray 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 Allan Gray Equity are associated (or correlated) with CoreShares TotalWldStock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoreShares TotalWldStock has no effect on the direction of Allan Gray i.e., Allan Gray and CoreShares TotalWldStock go up and down completely randomly.

Pair Corralation between Allan Gray and CoreShares TotalWldStock

If you would invest (100.00) in CoreShares TotalWldStock ETF on October 24, 2024 and sell it today you would earn a total of  100.00  from holding CoreShares TotalWldStock ETF or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Allan Gray Equity  vs.  CoreShares TotalWldStock ETF

Allan Gray Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allan Gray Equity has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong basic indicators, Allan Gray is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

CoreShares TotalWldStock

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CoreShares TotalWldStock ETF are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, CoreShares TotalWldStock may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Allan Gray and CoreShares TotalWldStock

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

The idea behind Allan Gray Equity and CoreShares TotalWldStock ETF 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.