Correlation Between Coreshares Index and Nampak

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

Diversification Opportunities for Coreshares Index and Nampak

-0.11

Correlation Coefficient

Coreshares Index  Nampak

Good diversification

The 3 months correlation between Coreshares and Nampak is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Coreshares Index Tracker and Nampak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nampak 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 Nampak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nampak has no effect on the direction of Coreshares Index i.e., Coreshares Index and Nampak go up and down completely randomly.

Pair Corralation between Coreshares Index and Nampak

Assuming the 90 days trading horizon Coreshares Index Tracker is expected to generate 0.28 times more return on investment than Nampak. However, Coreshares Index Tracker is 3.6 times less risky than Nampak. It trades about 0.06 of its potential returns per unit of risk. Nampak is currently generating about -0.13 per unit of risk. If you would invest  110,000  in Coreshares Index Tracker on September 24, 2024 and sell it today you would earn a total of  1,400  from holding Coreshares Index Tracker or generate 1.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Coreshares Index Tracker  vs.  Nampak

Coreshares Index Tracker

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Coreshares Index Tracker are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Nampak

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nampak has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Coreshares Index and Nampak

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

The idea behind Coreshares Index Tracker and Nampak 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..