Correlation Between Coronation Industrial and Coronation Global
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By analyzing existing cross correlation between Coronation Industrial and Coronation Global Optimum, you can compare the effects of market volatilities on Coronation Industrial and Coronation Global 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 Coronation Industrial with a short position of Coronation Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coronation Industrial and Coronation Global.
Diversification Opportunities for Coronation Industrial and Coronation Global
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Coronation and Coronation is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Coronation Industrial and Coronation Global Optimum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coronation Global Optimum and Coronation Industrial 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 Coronation Industrial are associated (or correlated) with Coronation Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coronation Global Optimum has no effect on the direction of Coronation Industrial i.e., Coronation Industrial and Coronation Global go up and down completely randomly.
Pair Corralation between Coronation Industrial and Coronation Global
Assuming the 90 days trading horizon Coronation Industrial is expected to generate 1.14 times more return on investment than Coronation Global. However, Coronation Industrial is 1.14 times more volatile than Coronation Global Optimum. It trades about 0.07 of its potential returns per unit of risk. Coronation Global Optimum is currently generating about 0.07 per unit of risk. If you would invest 25,080 in Coronation Industrial on September 4, 2024 and sell it today you would earn a total of 4,255 from holding Coronation Industrial or generate 16.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.18% |
| Values | Daily Returns |
Coronation Industrial vs. Coronation Global Optimum
Performance |
| Timeline |
| Coronation Industrial |
| Coronation Global Optimum |
Coronation Industrial and Coronation Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coronation Industrial and Coronation Global
The main advantage of trading using opposite Coronation Industrial and Coronation Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coronation Industrial position performs unexpectedly, Coronation Global 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 Coronation Global will offset losses from the drop in Coronation Global's long position.The idea behind Coronation Industrial and Coronation Global Optimum 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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Check out your portfolio center.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.
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