Correlation Between Coreshares Index and Raubex

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

Diversification Opportunities for Coreshares Index and Raubex

-0.14

Correlation Coefficient

Coreshares Index  Raubex

Good diversification

The 3 months correlation between Coreshares and Raubex is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Coreshares Index Tracker and Raubex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raubex 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 Raubex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raubex has no effect on the direction of Coreshares Index i.e., Coreshares Index and Raubex go up and down completely randomly.

Pair Corralation between Coreshares Index and Raubex

Assuming the 90 days trading horizon Coreshares Index is expected to generate 10.28 times less return on investment than Raubex. But when comparing it to its historical volatility, Coreshares Index Tracker is 2.41 times less risky than Raubex. It trades about 0.04 of its potential returns per unit of risk. Raubex is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  305,000  in Raubex on September 24, 2024 and sell it today you would earn a total of  220,600  from holding Raubex or generate 72.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Coreshares Index Tracker  vs.  Raubex

Coreshares Index Tracker

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Coreshares Index Tracker are ranked lower than 1 (%) 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.

Raubex

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Coreshares Index and Raubex

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

The idea behind Coreshares Index Tracker and Raubex 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.