Correlation Between Coronation Industrial and Coronation Financial
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By analyzing existing cross correlation between Coronation Industrial and Coronation Financial, you can compare the effects of market volatilities on Coronation Industrial and Coronation Financial 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 Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coronation Industrial and Coronation Financial.
Diversification Opportunities for Coronation Industrial and Coronation Financial
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Coronation and Coronation is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Coronation Industrial and Coronation Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coronation Financial 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 Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coronation Financial has no effect on the direction of Coronation Industrial i.e., Coronation Industrial and Coronation Financial go up and down completely randomly.
Pair Corralation between Coronation Industrial and Coronation Financial
Assuming the 90 days trading horizon Coronation Industrial is expected to generate 1.69 times less return on investment than Coronation Financial. But when comparing it to its historical volatility, Coronation Industrial is 1.14 times less risky than Coronation Financial. It trades about 0.07 of its potential returns per unit of risk. Coronation Financial is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,688 in Coronation Financial on September 4, 2024 and sell it today you would earn a total of 1,767 from holding Coronation Financial or generate 31.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.18% |
| Values | Daily Returns |
Coronation Industrial vs. Coronation Financial
Performance |
| Timeline |
| Coronation Industrial |
| Coronation Financial |
Coronation Industrial and Coronation Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coronation Industrial and Coronation Financial
The main advantage of trading using opposite Coronation Industrial and Coronation Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coronation Industrial position performs unexpectedly, Coronation Financial 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 Financial will offset losses from the drop in Coronation Financial's long position.The idea behind Coronation Industrial and Coronation Financial 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.
| Coronation Financial vs. Coronation Balanced Plus | Coronation Financial vs. Coronation Industrial | Coronation Financial vs. Coronation Capital Plus | Coronation Financial vs. Coronation Global Equity |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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