Correlation Between CoreShares Preference and Coreshares Index

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

By analyzing existing cross correlation between CoreShares Preference Share and Coreshares Index Tracker, you can compare the effects of market volatilities on CoreShares Preference and Coreshares Index 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 Preference with a short position of Coreshares Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoreShares Preference and Coreshares Index.

Diversification Opportunities for CoreShares Preference and Coreshares Index

0.0

Correlation Coefficient

CoreShares Preference  Coreshares Index

Pay attention - limited upside

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

Pair Corralation between CoreShares Preference and Coreshares Index

If you would invest  108,777  in Coreshares Index Tracker on November 27, 2024 and sell it today you would earn a total of  5,223  from holding Coreshares Index Tracker or generate 4.8% return on investment over 90 days.

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

CoreShares Preference Share  vs.  Coreshares Index Tracker

CoreShares Preference

Risk-Adjusted Performance

Very Weak

Over the last 90 days CoreShares Preference Share has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, CoreShares Preference is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Coreshares Index Tracker

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Coreshares Index Tracker are ranked lower than 6 (%) 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.

Pair Trading with CoreShares Preference and Coreshares Index

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

The idea behind CoreShares Preference Share and Coreshares Index Tracker 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.