Correlation Between Coreshares Index and Satrix Resi

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

Diversification Opportunities for Coreshares Index and Satrix Resi

0.12

Correlation Coefficient

Coreshares Index  Satrix Resi

Average diversification

The 3 months correlation between Coreshares and Satrix is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Coreshares Index Tracker and Satrix Resi ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satrix Resi ETF 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 Satrix Resi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satrix Resi ETF has no effect on the direction of Coreshares Index i.e., Coreshares Index and Satrix Resi go up and down completely randomly.

Pair Corralation between Coreshares Index and Satrix Resi

Assuming the 90 days trading horizon Coreshares Index is expected to generate 17.79 times less return on investment than Satrix Resi. But when comparing it to its historical volatility, Coreshares Index Tracker is 1.91 times less risky than Satrix Resi. It trades about 0.03 of its potential returns per unit of risk. Satrix Resi ETF is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  551,004  in Satrix Resi ETF on December 27, 2024 and sell it today you would earn a total of  155,496  from holding Satrix Resi ETF or generate 28.22% return on investment over 90 days.

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

Coreshares Index Tracker  vs.  Satrix Resi ETF

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 2 (%) 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.

Satrix Resi ETF

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Satrix Resi ETF are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Satrix Resi sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coreshares Index and Satrix Resi

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

The idea behind Coreshares Index Tracker and Satrix Resi ETF 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.