Correlation Between COAST ENTERTAINMENT and EQ Resources
Can any of the company-specific risk be diversified away by investing in both COAST ENTERTAINMENT and EQ Resources 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 EQ Resources 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 EQ Resources, you can compare the effects of market volatilities on COAST ENTERTAINMENT and EQ Resources 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 EQ Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of COAST ENTERTAINMENT and EQ Resources.
Diversification Opportunities for COAST ENTERTAINMENT and EQ Resources
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COAST and EQR is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and EQ Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQ Resources 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 EQ Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQ Resources has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and EQ Resources go up and down completely randomly.
Pair Corralation between COAST ENTERTAINMENT and EQ Resources
Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to under-perform the EQ Resources. But the stock apears to be less risky and, when comparing its historical volatility, COAST ENTERTAINMENT HOLDINGS is 1.65 times less risky than EQ Resources. The stock trades about -0.02 of its potential returns per unit of risk. The EQ Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4.85 in EQ Resources on August 30, 2024 and sell it today you would earn a total of 0.25 from holding EQ Resources or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COAST ENTERTAINMENT HOLDINGS vs. EQ Resources
Performance |
| Timeline |
| COAST ENTERTAINMENT |
| EQ Resources |
COAST ENTERTAINMENT and EQ Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COAST ENTERTAINMENT and EQ Resources
The main advantage of trading using opposite COAST ENTERTAINMENT and EQ Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COAST ENTERTAINMENT position performs unexpectedly, EQ Resources 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 EQ Resources will offset losses from the drop in EQ Resources' long position.| COAST ENTERTAINMENT vs. Viva Leisure | COAST ENTERTAINMENT vs. Toys R Us | COAST ENTERTAINMENT vs. Champion Iron | COAST ENTERTAINMENT vs. Ridley |
| EQ Resources vs. Ainsworth Game Technology | EQ Resources vs. COAST ENTERTAINMENT HOLDINGS | EQ Resources vs. Homeco Daily Needs | EQ Resources vs. Seven West Media |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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