Correlation Between ARN Media and COAST ENTERTAINMENT
Can any of the company-specific risk be diversified away by investing in both ARN Media and COAST ENTERTAINMENT 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 ARN Media and COAST ENTERTAINMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARN Media Limited and COAST ENTERTAINMENT HOLDINGS, you can compare the effects of market volatilities on ARN Media and COAST ENTERTAINMENT 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 ARN Media with a short position of COAST ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARN Media and COAST ENTERTAINMENT.
Diversification Opportunities for ARN Media and COAST ENTERTAINMENT
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ARN and COAST is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding ARN Media Limited and COAST ENTERTAINMENT HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COAST ENTERTAINMENT and ARN Media 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 ARN Media Limited are associated (or correlated) with COAST ENTERTAINMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COAST ENTERTAINMENT has no effect on the direction of ARN Media i.e., ARN Media and COAST ENTERTAINMENT go up and down completely randomly.
Pair Corralation between ARN Media and COAST ENTERTAINMENT
Assuming the 90 days trading horizon ARN Media Limited is expected to generate 1.06 times more return on investment than COAST ENTERTAINMENT. However, ARN Media is 1.06 times more volatile than COAST ENTERTAINMENT HOLDINGS. It trades about 0.01 of its potential returns per unit of risk. COAST ENTERTAINMENT HOLDINGS is currently generating about 0.01 per unit of risk. If you would invest 74.00 in ARN Media Limited on August 25, 2024 and sell it today you would earn a total of 0.00 from holding ARN Media Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARN Media Limited vs. COAST ENTERTAINMENT HOLDINGS
Performance |
| Timeline |
| ARN Media Limited |
| COAST ENTERTAINMENT |
ARN Media and COAST ENTERTAINMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARN Media and COAST ENTERTAINMENT
The main advantage of trading using opposite ARN Media and COAST ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARN Media position performs unexpectedly, COAST ENTERTAINMENT 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 COAST ENTERTAINMENT will offset losses from the drop in COAST ENTERTAINMENT's long position.| ARN Media vs. Gtn | ARN Media vs. Dynamic Drill And | ARN Media vs. Insignia Financial | ARN Media vs. G8 Education |
| COAST ENTERTAINMENT vs. Ainsworth Game Technology | COAST ENTERTAINMENT vs. Bio Gene Technology | COAST ENTERTAINMENT vs. Kip McGrath Education | COAST ENTERTAINMENT vs. Land Homes Group |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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