Correlation Between Coronation Capital and Dow Jones
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By analyzing existing cross correlation between Coronation Capital Plus and Dow Jones Industrial, you can compare the effects of market volatilities on Coronation Capital and Dow Jones 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 Capital with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coronation Capital and Dow Jones.
Diversification Opportunities for Coronation Capital and Dow Jones
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Coronation and Dow is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Coronation Capital Plus and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Coronation Capital 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 Capital Plus are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Coronation Capital i.e., Coronation Capital and Dow Jones go up and down completely randomly.
Pair Corralation between Coronation Capital and Dow Jones
Assuming the 90 days trading horizon Coronation Capital is expected to generate 2.17 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Coronation Capital Plus is 2.25 times less risky than Dow Jones. It trades about 0.35 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 4,205,219 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 285,846 from holding Dow Jones Industrial or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Coronation Capital Plus vs. Dow Jones Industrial
Performance |
| Timeline |
Coronation Capital and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Coronation Capital Plus
Pair trading matchups for Coronation Capital
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Coronation Capital and Dow Jones
The main advantage of trading using opposite Coronation Capital and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coronation Capital position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Coronation Capital vs. Coronation Global Optimum | Coronation Capital vs. Coronation Balanced Plus | Coronation Capital vs. Coronation Industrial | Coronation Capital vs. Coronation Global Equity |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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