Correlation Between CoreShares and CoreShares TotalWldStock

Can any of the company-specific risk be diversified away by investing in both CoreShares and CoreShares TotalWldStock 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 and CoreShares TotalWldStock into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CoreShares SP Global and CoreShares TotalWldStock ETF, you can compare the effects of market volatilities on CoreShares and CoreShares TotalWldStock 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 with a short position of CoreShares TotalWldStock. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoreShares and CoreShares TotalWldStock.

Diversification Opportunities for CoreShares and CoreShares TotalWldStock

0.03

Correlation Coefficient

CoreShares  CoreShares TotalWldStock

Significant diversification

The 3 months correlation between CoreShares and CoreShares is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding CoreShares SP Global and CoreShares TotalWldStock ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreShares TotalWldStock and CoreShares 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 SP Global are associated (or correlated) with CoreShares TotalWldStock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoreShares TotalWldStock has no effect on the direction of CoreShares i.e., CoreShares and CoreShares TotalWldStock go up and down completely randomly.

Pair Corralation between CoreShares and CoreShares TotalWldStock

Assuming the 90 days trading horizon CoreShares SP Global is expected to generate 0.95 times more return on investment than CoreShares TotalWldStock. However, CoreShares SP Global is 1.05 times less risky than CoreShares TotalWldStock. It trades about 0.11 of its potential returns per unit of risk. CoreShares TotalWldStock ETF is currently generating about 0.03 per unit of risk. If you would invest  205,200  in CoreShares SP Global on December 4, 2024 and sell it today you would earn a total of  3,500  from holding CoreShares SP Global or generate 1.71% return on investment over 90 days.

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

CoreShares SP Global  vs.  CoreShares TotalWldStock ETF

CoreShares SP Global

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CoreShares SP Global are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, CoreShares is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CoreShares TotalWldStock

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CoreShares TotalWldStock ETF are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, CoreShares TotalWldStock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CoreShares and CoreShares TotalWldStock

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

The idea behind CoreShares SP Global and CoreShares TotalWldStock 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.