Correlation Between COAST ENTERTAINMENT and Embark Education
Can any of the company-specific risk be diversified away by investing in both COAST ENTERTAINMENT and Embark Education 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 Embark Education 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 Embark Education Group, you can compare the effects of market volatilities on COAST ENTERTAINMENT and Embark Education 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 Embark Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of COAST ENTERTAINMENT and Embark Education.
Diversification Opportunities for COAST ENTERTAINMENT and Embark Education
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COAST and Embark is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and Embark Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embark Education 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 Embark Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embark Education has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and Embark Education go up and down completely randomly.
Pair Corralation between COAST ENTERTAINMENT and Embark Education
Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to generate 1.62 times more return on investment than Embark Education. However, COAST ENTERTAINMENT is 1.62 times more volatile than Embark Education Group. It trades about 0.06 of its potential returns per unit of risk. Embark Education Group is currently generating about 0.06 per unit of risk. If you would invest 49.00 in COAST ENTERTAINMENT HOLDINGS on November 2, 2024 and sell it today you would earn a total of 1.00 from holding COAST ENTERTAINMENT HOLDINGS or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COAST ENTERTAINMENT HOLDINGS vs. Embark Education Group
Performance |
| Timeline |
| COAST ENTERTAINMENT |
| Embark Education |
COAST ENTERTAINMENT and Embark Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COAST ENTERTAINMENT and Embark Education
The main advantage of trading using opposite COAST ENTERTAINMENT and Embark Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COAST ENTERTAINMENT position performs unexpectedly, Embark Education 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 Embark Education will offset losses from the drop in Embark Education's long position.| COAST ENTERTAINMENT vs. Aneka Tambang Tbk | COAST ENTERTAINMENT vs. Commonwealth Bank | COAST ENTERTAINMENT vs. Commonwealth Bank of | COAST ENTERTAINMENT vs. Australia and New |
| Embark Education vs. Autosports Group | Embark Education vs. Step One Clothing | Embark Education vs. EROAD | Embark Education vs. Vitura Health Limited |
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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