Correlation Between Gemfields and CoreShares TotalWldStock

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

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

Diversification Opportunities for Gemfields and CoreShares TotalWldStock

-0.86

Correlation Coefficient

Gemfields  CoreShares TotalWldStock

Pay attention - limited upside

The 3 months correlation between Gemfields and CoreShares is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Gemfields Group and CoreShares TotalWldStock ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreShares TotalWldStock and Gemfields 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 Gemfields Group 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 Gemfields i.e., Gemfields and CoreShares TotalWldStock go up and down completely randomly.

Pair Corralation between Gemfields and CoreShares TotalWldStock

Assuming the 90 days trading horizon Gemfields Group is expected to under-perform the CoreShares TotalWldStock. In addition to that, Gemfields is 13.71 times more volatile than CoreShares TotalWldStock ETF. It trades about -0.05 of its total potential returns per unit of risk. CoreShares TotalWldStock ETF is currently generating about 0.24 per unit of volatility. If you would invest  156,100  in CoreShares TotalWldStock ETF on October 12, 2024 and sell it today you would earn a total of  4,600  from holding CoreShares TotalWldStock ETF or generate 2.95% return on investment over 90 days.

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

Gemfields Group  vs.  CoreShares TotalWldStock ETF

Gemfields Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gemfields Group 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 February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

CoreShares TotalWldStock

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CoreShares TotalWldStock ETF are ranked lower than 8 (%) 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 latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gemfields and CoreShares TotalWldStock

The main advantage of trading using opposite Gemfields and CoreShares TotalWldStock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemfields 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 Gemfields Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.