Correlation Between Coreshares Index and AH Vest

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

By analyzing existing cross correlation between Coreshares Index Tracker and AH Vest Limited, you can compare the effects of market volatilities on Coreshares Index and AH Vest 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 Index with a short position of AH Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coreshares Index and AH Vest.

Diversification Opportunities for Coreshares Index and AH Vest

0.16

Correlation Coefficient

Coreshares Index  AH Vest

Average diversification

The 3 months correlation between Coreshares and AHL is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Coreshares Index Tracker and AH Vest Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AH Vest Limited and Coreshares Index 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 Index Tracker are associated (or correlated) with AH Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AH Vest Limited has no effect on the direction of Coreshares Index i.e., Coreshares Index and AH Vest go up and down completely randomly.

Pair Corralation between Coreshares Index and AH Vest

Assuming the 90 days trading horizon Coreshares Index is expected to generate 4.48 times less return on investment than AH Vest. But when comparing it to its historical volatility, Coreshares Index Tracker is 3.87 times less risky than AH Vest. It trades about 0.11 of its potential returns per unit of risk. AH Vest Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,000.00  in AH Vest Limited on September 5, 2024 and sell it today you would earn a total of  300.00  from holding AH Vest Limited or generate 30.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Coreshares Index Tracker  vs.  AH Vest Limited

Coreshares Index Tracker

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Coreshares Index Tracker are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, Coreshares Index may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AH Vest Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AH Vest Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, AH Vest exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coreshares Index and AH Vest

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

The idea behind Coreshares Index Tracker and AH Vest Limited 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.