Correlation Between CoreShares Preference and Investec Limited

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

Diversification Opportunities for CoreShares Preference and Investec Limited

0.0

Correlation Coefficient

CoreShares Preference  Investec Limited

Pay attention - limited upside

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

Pair Corralation between CoreShares Preference and Investec Limited

If you would invest  882,700  in Investec Limited NON on September 15, 2024 and sell it today you would earn a total of  47,300  from holding Investec Limited NON or generate 5.36% 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.  Investec Limited NON

CoreShares Preference

Risk-Adjusted Performance

0 of 100

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.

Investec Limited NON

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Investec Limited NON are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Investec Limited is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CoreShares Preference and Investec Limited

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

The idea behind CoreShares Preference Share and Investec Limited NON 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.