Correlation Between Coronation Smaller and Coronation Bond

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

By analyzing existing cross correlation between Coronation Smaller Companies and Coronation Bond, you can compare the effects of market volatilities on Coronation Smaller and Coronation Bond 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 Smaller with a short position of Coronation Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coronation Smaller and Coronation Bond.

Diversification Opportunities for Coronation Smaller and Coronation Bond

0.0

Correlation Coefficient

Coronation Smaller  Coronation Bond

Pay attention - limited upside

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

Pair Corralation between Coronation Smaller and Coronation Bond

If you would invest  12,913  in Coronation Smaller Companies on September 4, 2024 and sell it today you would earn a total of  987.00  from holding Coronation Smaller Companies or generate 7.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Coronation Smaller Companies  vs.  Coronation Bond

Coronation Smaller

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Coronation Smaller Companies are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly weak basic indicators, Coronation Smaller may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Coronation Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coronation Bond has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Coronation Bond is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Coronation Smaller and Coronation Bond

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

The idea behind Coronation Smaller Companies and Coronation Bond 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.