Correlation Between CoreShares Preference and AfricaRhodium ETF

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

By analyzing existing cross correlation between CoreShares Preference Share and AfricaRhodium ETF, you can compare the effects of market volatilities on CoreShares Preference and AfricaRhodium ETF 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 Preference with a short position of AfricaRhodium ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoreShares Preference and AfricaRhodium ETF.

Diversification Opportunities for CoreShares Preference and AfricaRhodium ETF

0.0

Correlation Coefficient

CoreShares Preference  AfricaRhodium ETF

Pay attention - limited upside

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

Pair Corralation between CoreShares Preference and AfricaRhodium ETF

If you would invest  7,700,000  in AfricaRhodium ETF on September 3, 2024 and sell it today you would lose (133,000) from holding AfricaRhodium ETF or give up 1.73% of portfolio value over 90 days.

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

CoreShares Preference Share  vs.  AfricaRhodium ETF

CoreShares Preference

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CoreShares Preference Share has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, CoreShares Preference is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

AfricaRhodium ETF

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CoreShares Preference and AfricaRhodium ETF

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

The idea behind CoreShares Preference Share and AfricaRhodium ETF 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.