Correlation Between Coronation Equity and Coronation Global

Can any of the company-specific risk be diversified away by investing in both Coronation Equity 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 Equity 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 Equity and Coronation Global Optimum, you can compare the effects of market volatilities on Coronation Equity 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 Equity with a short position of Coronation Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coronation Equity and Coronation Global.

Diversification Opportunities for Coronation Equity and Coronation Global

0.92

Correlation Coefficient

Coronation Equity  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 Equity and Coronation Global Optimum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coronation Global Optimum and Coronation Equity 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 Equity 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 Optimum has no effect on the direction of Coronation Equity i.e., Coronation Equity and Coronation Global go up and down completely randomly.

Pair Corralation between Coronation Equity and Coronation Global

Assuming the 90 days trading horizon Coronation Equity is expected to under-perform the Coronation Global. But the fund apears to be less risky and, when comparing its historical volatility, Coronation Equity is 1.33 times less risky than Coronation Global. The fund trades about -0.22 of its potential returns per unit of risk. The Coronation Global Optimum is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  18,204  in Coronation Global Optimum on October 9, 2024 and sell it today you would earn a total of  25.00  from holding Coronation Global Optimum or generate 0.14% return on investment over 90 days.

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

Coronation Equity  vs.  Coronation Global Optimum

Coronation Equity

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Coronation Equity are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly inconsistent basic indicators, Coronation Equity may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Coronation Global Optimum

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Coronation Global Optimum are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Coronation Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Coronation Equity and Coronation Global

The main advantage of trading using opposite Coronation Equity and Coronation Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coronation Equity 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 Equity and Coronation Global Optimum 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.