Correlation Between Coronation Global and Analytics

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

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

Diversification Opportunities for Coronation Global and Analytics

0.6

Correlation Coefficient

Coronation Global  Analytics

Poor diversification

The 3 months correlation between Coronation and Analytics is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Coronation Global Equity and Analytics Ci Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analytics Ci Balanced 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 Equity are associated (or correlated) with Analytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analytics Ci Balanced has no effect on the direction of Coronation Global i.e., Coronation Global and Analytics go up and down completely randomly.

Pair Corralation between Coronation Global and Analytics

Assuming the 90 days trading horizon Coronation Global Equity is expected to generate 3.35 times more return on investment than Analytics. However, Coronation Global is 3.35 times more volatile than Analytics Ci Balanced. It trades about 0.15 of its potential returns per unit of risk. Analytics Ci Balanced is currently generating about -0.04 per unit of risk. If you would invest  267.00  in Coronation Global Equity on December 4, 2024 and sell it today you would earn a total of  27.00  from holding Coronation Global Equity or generate 10.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Coronation Global Equity  vs.  Analytics Ci Balanced

Coronation Global Equity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Coronation Global Equity are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Coronation Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Analytics Ci Balanced

Risk-Adjusted Performance

Very Weak

Over the last 90 days Analytics Ci Balanced has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Analytics 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 Global and Analytics

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

The idea behind Coronation Global Equity and Analytics Ci Balanced 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.