Correlation Between Coreshares Index and Oceana

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

Diversification Opportunities for Coreshares Index and Oceana

-0.44

Correlation Coefficient

Coreshares Index  Oceana

Very good diversification

The 3 months correlation between Coreshares and Oceana is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Coreshares Index Tracker and Oceana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceana 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 Oceana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceana has no effect on the direction of Coreshares Index i.e., Coreshares Index and Oceana go up and down completely randomly.

Pair Corralation between Coreshares Index and Oceana

Assuming the 90 days trading horizon Coreshares Index Tracker is expected to generate 0.75 times more return on investment than Oceana. However, Coreshares Index Tracker is 1.34 times less risky than Oceana. It trades about 0.05 of its potential returns per unit of risk. Oceana is currently generating about -0.2 per unit of risk. If you would invest  109,770  in Coreshares Index Tracker on December 3, 2024 and sell it today you would earn a total of  3,030  from holding Coreshares Index Tracker or generate 2.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Coreshares Index Tracker  vs.  Oceana

Coreshares Index Tracker

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Coreshares Index Tracker are ranked lower than 4 (%) 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.

Oceana

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oceana has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Coreshares Index and Oceana

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

The idea behind Coreshares Index Tracker and Oceana 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.