Correlation Between Coronation Global and Coronation Global

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

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

Diversification Opportunities for Coronation Global and Coronation Global

0.92

Correlation Coefficient

Coronation Global  Coronation Global

Almost no diversification

The 3 months correlation between Coronation and Coronation is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Coronation Global Optimum and Coronation Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coronation Global Equity and Coronation Global 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 Coronation Global Optimum are associated (or correlated) with Coronation Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coronation Global Equity has no effect on the direction of Coronation Global i.e., Coronation Global and Coronation Global go up and down completely randomly.

Pair Corralation between Coronation Global and Coronation Global

Assuming the 90 days trading horizon Coronation Global Optimum is expected to generate 0.81 times more return on investment than Coronation Global. However, Coronation Global Optimum is 1.24 times less risky than Coronation Global. It trades about 0.08 of its potential returns per unit of risk. Coronation Global Equity is currently generating about 0.04 per unit of risk. If you would invest  18,154  in Coronation Global Optimum on October 22, 2024 and sell it today you would earn a total of  215.00  from holding Coronation Global Optimum or generate 1.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	94.44%
Values	Daily Returns

Coronation Global Optimum  vs.  Coronation Global Equity

Coronation Global Optimum

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Coronation Global Optimum are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Coronation Global may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Coronation Global Equity

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Coronation Global Equity are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Coronation Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coronation Global and Coronation Global

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

The idea behind Coronation Global Optimum and Coronation Global Equity 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.