Correlation Between COAST ENTERTAINMENT and Cooper Metals
Can any of the company-specific risk be diversified away by investing in both COAST ENTERTAINMENT and Cooper Metals 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 COAST ENTERTAINMENT and Cooper Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COAST ENTERTAINMENT HOLDINGS and Cooper Metals, you can compare the effects of market volatilities on COAST ENTERTAINMENT and Cooper Metals 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 COAST ENTERTAINMENT with a short position of Cooper Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of COAST ENTERTAINMENT and Cooper Metals.
Diversification Opportunities for COAST ENTERTAINMENT and Cooper Metals
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COAST and Cooper is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and Cooper Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Metals and COAST ENTERTAINMENT 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 COAST ENTERTAINMENT HOLDINGS are associated (or correlated) with Cooper Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Metals has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and Cooper Metals go up and down completely randomly.
Pair Corralation between COAST ENTERTAINMENT and Cooper Metals
Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to generate 0.32 times more return on investment than Cooper Metals. However, COAST ENTERTAINMENT HOLDINGS is 3.11 times less risky than Cooper Metals. It trades about -0.01 of its potential returns per unit of risk. Cooper Metals is currently generating about -0.01 per unit of risk. If you would invest 60.00 in COAST ENTERTAINMENT HOLDINGS on September 12, 2024 and sell it today you would lose (13.00) from holding COAST ENTERTAINMENT HOLDINGS or give up 21.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COAST ENTERTAINMENT HOLDINGS vs. Cooper Metals
Performance |
| Timeline |
| COAST ENTERTAINMENT |
| Cooper Metals |
COAST ENTERTAINMENT and Cooper Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COAST ENTERTAINMENT and Cooper Metals
The main advantage of trading using opposite COAST ENTERTAINMENT and Cooper Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COAST ENTERTAINMENT position performs unexpectedly, Cooper Metals 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 Cooper Metals will offset losses from the drop in Cooper Metals' long position.| COAST ENTERTAINMENT vs. WiseTech Global Limited | COAST ENTERTAINMENT vs. My Foodie Box | COAST ENTERTAINMENT vs. Ras Technology Holdings | COAST ENTERTAINMENT vs. Retail Food Group |
| Cooper Metals vs. Aristocrat Leisure | Cooper Metals vs. Dicker Data | Cooper Metals vs. Champion Iron | Cooper Metals vs. Data3 |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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