Correlation Between COAST ENTERTAINMENT and Environmental
Can any of the company-specific risk be diversified away by investing in both COAST ENTERTAINMENT and Environmental 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 Environmental 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 The Environmental Group, you can compare the effects of market volatilities on COAST ENTERTAINMENT and Environmental 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 Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of COAST ENTERTAINMENT and Environmental.
Diversification Opportunities for COAST ENTERTAINMENT and Environmental
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COAST and Environmental is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and The Environmental Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Environmental 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 Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Environmental has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and Environmental go up and down completely randomly.
Pair Corralation between COAST ENTERTAINMENT and Environmental
Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to generate 0.49 times more return on investment than Environmental. However, COAST ENTERTAINMENT HOLDINGS is 2.04 times less risky than Environmental. It trades about -0.04 of its potential returns per unit of risk. The Environmental Group is currently generating about -0.35 per unit of risk. If you would invest 45.00 in COAST ENTERTAINMENT HOLDINGS on September 4, 2024 and sell it today you would lose (1.00) from holding COAST ENTERTAINMENT HOLDINGS or give up 2.22% 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. The Environmental Group
Performance |
| Timeline |
| COAST ENTERTAINMENT |
| The Environmental |
COAST ENTERTAINMENT and Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COAST ENTERTAINMENT and Environmental
The main advantage of trading using opposite COAST ENTERTAINMENT and Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COAST ENTERTAINMENT position performs unexpectedly, Environmental 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 Environmental will offset losses from the drop in Environmental's long position.| COAST ENTERTAINMENT vs. Viva Leisure | COAST ENTERTAINMENT vs. Toys R Us | COAST ENTERTAINMENT vs. Lendlease Group | COAST ENTERTAINMENT vs. Perseus Mining |
| Environmental vs. Advanced Braking Technology | Environmental vs. Thorney Technologies | Environmental vs. Richmond Vanadium Technology | Environmental vs. Dug Technology |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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