Correlation Between Coreshares Index and Pepkor Holdings

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

Diversification Opportunities for Coreshares Index and Pepkor Holdings

0.0

Correlation Coefficient

Coreshares Index  Pepkor Holdings

Pay attention - limited upside

The 3 months correlation between Coreshares and Pepkor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Coreshares Index Tracker and Pepkor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pepkor Holdings 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 Pepkor Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pepkor Holdings has no effect on the direction of Coreshares Index i.e., Coreshares Index and Pepkor Holdings go up and down completely randomly.

Pair Corralation between Coreshares Index and Pepkor Holdings

If you would invest  111,061  in Coreshares Index Tracker on December 30, 2024 and sell it today you would lose (261.00) from holding Coreshares Index Tracker or give up 0.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Coreshares Index Tracker  vs.  Pepkor Holdings

Coreshares Index Tracker

Risk-Adjusted Performance

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.

Pepkor Holdings

Risk-Adjusted Performance

OK

Over the last 90 days Pepkor Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Pepkor Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Coreshares Index and Pepkor Holdings

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

The idea behind Coreshares Index Tracker and Pepkor Holdings 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .