Correlation Between Coastal Financial and Vinci SA
Can any of the company-specific risk be diversified away by investing in both Coastal Financial and Vinci SA 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 Financial and Vinci SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coastal Financial Corp and Vinci SA ADR, you can compare the effects of market volatilities on Coastal Financial and Vinci SA 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 Financial with a short position of Vinci SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coastal Financial and Vinci SA.
Diversification Opportunities for Coastal Financial and Vinci SA
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coastal and Vinci is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Coastal Financial Corp and Vinci SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci SA ADR and Coastal Financial 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 Financial Corp are associated (or correlated) with Vinci SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci SA ADR has no effect on the direction of Coastal Financial i.e., Coastal Financial and Vinci SA go up and down completely randomly.
Pair Corralation between Coastal Financial and Vinci SA
Considering the 90-day investment horizon Coastal Financial Corp is expected to generate 1.54 times more return on investment than Vinci SA. However, Coastal Financial is 1.54 times more volatile than Vinci SA ADR. It trades about 0.18 of its potential returns per unit of risk. Vinci SA ADR is currently generating about -0.05 per unit of risk. If you would invest 3,845 in Coastal Financial Corp on September 1, 2024 and sell it today you would earn a total of 3,810 from holding Coastal Financial Corp or generate 99.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coastal Financial Corp vs. Vinci SA ADR
Performance |
| Timeline |
| Coastal Financial Corp |
| Vinci SA ADR |
Coastal Financial and Vinci SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coastal Financial and Vinci SA
The main advantage of trading using opposite Coastal Financial and Vinci SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coastal Financial position performs unexpectedly, Vinci SA 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 Vinci SA will offset losses from the drop in Vinci SA's long position.| Coastal Financial vs. Affinity Bancshares | Coastal Financial vs. Home Federal Bancorp | Coastal Financial vs. First Business Financial | Coastal Financial vs. Old Point Financial |
| Vinci SA vs. Orion Group Holdings | Vinci SA vs. Agrify Corp | Vinci SA vs. Matrix Service Co | Vinci SA vs. MYR 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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