Correlation Between Coastal Capital and Intl Star
Can any of the company-specific risk be diversified away by investing in both Coastal Capital and Intl Star 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 Coastal Capital and Intl Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coastal Capital Acq and Intl Star, you can compare the effects of market volatilities on Coastal Capital and Intl Star 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 Coastal Capital with a short position of Intl Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coastal Capital and Intl Star.
Diversification Opportunities for Coastal Capital and Intl Star
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coastal and Intl is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Coastal Capital Acq and Intl Star in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intl Star and Coastal Capital 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 Coastal Capital Acq are associated (or correlated) with Intl Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intl Star has no effect on the direction of Coastal Capital i.e., Coastal Capital and Intl Star go up and down completely randomly.
Pair Corralation between Coastal Capital and Intl Star
Given the investment horizon of 90 days Coastal Capital is expected to generate 1.03 times less return on investment than Intl Star. In addition to that, Coastal Capital is 1.27 times more volatile than Intl Star. It trades about 0.05 of its total potential returns per unit of risk. Intl Star is currently generating about 0.06 per unit of volatility. If you would invest 0.08 in Intl Star on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Intl Star or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coastal Capital Acq vs. Intl Star
Performance |
| Timeline |
| Coastal Capital Acq |
| Intl Star |
Coastal Capital and Intl Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coastal Capital and Intl Star
The main advantage of trading using opposite Coastal Capital and Intl Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coastal Capital position performs unexpectedly, Intl Star 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 Intl Star will offset losses from the drop in Intl Star's long position.| Coastal Capital vs. Green Planet Bio | Coastal Capital vs. Azure Holding Group | Coastal Capital vs. Four Leaf Acquisition | Coastal Capital vs. Opus Magnum Ameris |
| Intl Star vs. Green Planet Bio | Intl Star vs. Azure Holding Group | Intl Star vs. Four Leaf Acquisition | Intl Star vs. Opus Magnum Ameris |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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