Correlation Between British Amer and COAST ENTERTAINMENT
Can any of the company-specific risk be diversified away by investing in both British Amer 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 British Amer and COAST ENTERTAINMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bailador Technology Invest and COAST ENTERTAINMENT HOLDINGS, you can compare the effects of market volatilities on British Amer 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 British Amer with a short position of COAST ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and COAST ENTERTAINMENT.
Diversification Opportunities for British Amer and COAST ENTERTAINMENT
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between British and COAST is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest and COAST ENTERTAINMENT HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COAST ENTERTAINMENT and British Amer 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 Bailador Technology Invest 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 British Amer i.e., British Amer and COAST ENTERTAINMENT go up and down completely randomly.
Pair Corralation between British Amer and COAST ENTERTAINMENT
Assuming the 90 days trading horizon Bailador Technology Invest is expected to under-perform the COAST ENTERTAINMENT. But the stock apears to be less risky and, when comparing its historical volatility, Bailador Technology Invest is 3.55 times less risky than COAST ENTERTAINMENT. The stock trades about -0.14 of its potential returns per unit of risk. The COAST ENTERTAINMENT HOLDINGS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 47.00 in COAST ENTERTAINMENT HOLDINGS on September 13, 2024 and sell it today you would earn a total of 2.00 from holding COAST ENTERTAINMENT HOLDINGS or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bailador Technology Invest vs. COAST ENTERTAINMENT HOLDINGS
Performance |
| Timeline |
| Bailador Technology |
| COAST ENTERTAINMENT |
British Amer and COAST ENTERTAINMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and COAST ENTERTAINMENT
The main advantage of trading using opposite British Amer and COAST ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer 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.| British Amer vs. Embark Education Group | British Amer vs. Diversified United Investment | British Amer vs. Cleanaway Waste Management | British Amer vs. MFF Capital Investments |
| COAST ENTERTAINMENT vs. Queste Communications | COAST ENTERTAINMENT vs. Actinogen Medical | COAST ENTERTAINMENT vs. Regis Healthcare | COAST ENTERTAINMENT vs. Apiam Animal Health |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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