Correlation Between Coronation Global and Astoria Investments

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

Diversification Opportunities for Coronation Global and Astoria Investments

0.31

Correlation Coefficient

Coronation Global  Astoria Investments

Weak diversification

The 3 months correlation between Coronation and Astoria is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Coronation Global Equity and Astoria Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoria Investments 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 Astoria Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astoria Investments has no effect on the direction of Coronation Global i.e., Coronation Global and Astoria Investments go up and down completely randomly.

Pair Corralation between Coronation Global and Astoria Investments

Assuming the 90 days trading horizon Coronation Global Equity is expected to generate 0.63 times more return on investment than Astoria Investments. However, Coronation Global Equity is 1.58 times less risky than Astoria Investments. It trades about 0.21 of its potential returns per unit of risk. Astoria Investments is currently generating about 0.05 per unit of risk. If you would invest  229.00  in Coronation Global Equity on October 20, 2024 and sell it today you would earn a total of  39.00  from holding Coronation Global Equity or generate 17.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Coronation Global Equity  vs.  Astoria Investments

Coronation Global Equity

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Coronation Global Equity are ranked lower than 16 (%) 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.

Astoria Investments

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Astoria Investments are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Astoria Investments is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Coronation Global and Astoria Investments

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

The idea behind Coronation Global Equity and Astoria Investments 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.