Correlation Between Coronation Property and Coronation Industrial

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

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

Diversification Opportunities for Coronation Property and Coronation Industrial

0.15

Correlation Coefficient

Coronation Property  Coronation Industrial

Average diversification

The 3 months correlation between Coronation and Coronation is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Coronation Property Equity and Coronation Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coronation Industrial and Coronation Property 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 Property Equity are associated (or correlated) with Coronation Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coronation Industrial has no effect on the direction of Coronation Property i.e., Coronation Property and Coronation Industrial go up and down completely randomly.

Pair Corralation between Coronation Property and Coronation Industrial

Assuming the 90 days trading horizon Coronation Property Equity is expected to under-perform the Coronation Industrial. But the fund apears to be less risky and, when comparing its historical volatility, Coronation Property Equity is 1.28 times less risky than Coronation Industrial. The fund trades about -0.14 of its potential returns per unit of risk. The Coronation Industrial is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  29,117  in Coronation Industrial on December 5, 2024 and sell it today you would earn a total of  879.00  from holding Coronation Industrial or generate 3.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

Coronation Property Equity  vs.  Coronation Industrial

Coronation Property

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coronation Property Equity has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Coronation Industrial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Coronation Industrial are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong basic indicators, Coronation Industrial is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Coronation Property and Coronation Industrial

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

The idea behind Coronation Property Equity and Coronation Industrial 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.