Correlation Between CONSOLIDATED HALLMARK and CORONATION INSURANCE

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

By analyzing existing cross correlation between CONSOLIDATED HALLMARK INSURANCE and CORONATION INSURANCE PLC, you can compare the effects of market volatilities on CONSOLIDATED HALLMARK and CORONATION INSURANCE 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 CONSOLIDATED HALLMARK with a short position of CORONATION INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONSOLIDATED HALLMARK and CORONATION INSURANCE.

Diversification Opportunities for CONSOLIDATED HALLMARK and CORONATION INSURANCE

0.79

Correlation Coefficient

CONSOLIDATED HALLMARK  CORONATION INSURANCE

Poor diversification

The 3 months correlation between CONSOLIDATED and CORONATION is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding CONSOLIDATED HALLMARK INSURANC and CORONATION INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORONATION INSURANCE PLC and CONSOLIDATED HALLMARK 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 CONSOLIDATED HALLMARK INSURANCE are associated (or correlated) with CORONATION INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORONATION INSURANCE PLC has no effect on the direction of CONSOLIDATED HALLMARK i.e., CONSOLIDATED HALLMARK and CORONATION INSURANCE go up and down completely randomly.

Pair Corralation between CONSOLIDATED HALLMARK and CORONATION INSURANCE

Assuming the 90 days trading horizon CONSOLIDATED HALLMARK INSURANCE is expected to generate 1.14 times more return on investment than CORONATION INSURANCE. However, CONSOLIDATED HALLMARK is 1.14 times more volatile than CORONATION INSURANCE PLC. It trades about 0.18 of its potential returns per unit of risk. CORONATION INSURANCE PLC is currently generating about 0.17 per unit of risk. If you would invest  152.00  in CONSOLIDATED HALLMARK INSURANCE on September 13, 2024 and sell it today you would earn a total of  87.00  from holding CONSOLIDATED HALLMARK INSURANCE or generate 57.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

CONSOLIDATED HALLMARK INSURANC  vs.  CORONATION INSURANCE PLC

CONSOLIDATED HALLMARK

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CONSOLIDATED HALLMARK INSURANCE are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, CONSOLIDATED HALLMARK disclosed solid returns over the last few months and may actually be approaching a breakup point.

CORONATION INSURANCE PLC

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CORONATION INSURANCE PLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward indicators, CORONATION INSURANCE showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CONSOLIDATED HALLMARK and CORONATION INSURANCE

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

The idea behind CONSOLIDATED HALLMARK INSURANCE and CORONATION INSURANCE PLC 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.