Correlation Between Coreshares Index and Affinity

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

By analyzing existing cross correlation between Coreshares Index Tracker and Affinity Ci Growth, you can compare the effects of market volatilities on Coreshares Index and Affinity 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 Coreshares Index with a short position of Affinity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coreshares Index and Affinity.

Diversification Opportunities for Coreshares Index and Affinity

-0.09

Correlation Coefficient

Coreshares Index  Affinity

Good diversification

The 3 months correlation between Coreshares and Affinity is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Coreshares Index Tracker and Affinity Ci Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity Ci Growth and Coreshares Index 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 Coreshares Index Tracker are associated (or correlated) with Affinity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affinity Ci Growth has no effect on the direction of Coreshares Index i.e., Coreshares Index and Affinity go up and down completely randomly.

Pair Corralation between Coreshares Index and Affinity

Assuming the 90 days trading horizon Coreshares Index Tracker is expected to generate 1.7 times more return on investment than Affinity. However, Coreshares Index is 1.7 times more volatile than Affinity Ci Growth. It trades about 0.08 of its potential returns per unit of risk. Affinity Ci Growth is currently generating about 0.12 per unit of risk. If you would invest  90,351  in Coreshares Index Tracker on October 27, 2024 and sell it today you would earn a total of  20,349  from holding Coreshares Index Tracker or generate 22.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.67%
Values	Daily Returns

Coreshares Index Tracker  vs.  Affinity Ci Growth

Coreshares Index Tracker

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coreshares Index Tracker has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Coreshares Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Affinity Ci Growth

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Affinity Ci Growth are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Affinity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Coreshares Index and Affinity

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

The idea behind Coreshares Index Tracker and Affinity Ci Growth 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..