Correlation Between COAST ENTERTAINMENT and Hotel Property
Can any of the company-specific risk be diversified away by investing in both COAST ENTERTAINMENT and Hotel Property 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 Hotel Property 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 Hotel Property Investments, you can compare the effects of market volatilities on COAST ENTERTAINMENT and Hotel Property 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 Hotel Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of COAST ENTERTAINMENT and Hotel Property.
Diversification Opportunities for COAST ENTERTAINMENT and Hotel Property
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between COAST and Hotel is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and Hotel Property Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Property Inves 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 Hotel Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Property Inves has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and Hotel Property go up and down completely randomly.
Pair Corralation between COAST ENTERTAINMENT and Hotel Property
Assuming the 90 days trading horizon COAST ENTERTAINMENT is expected to generate 2.81 times less return on investment than Hotel Property. In addition to that, COAST ENTERTAINMENT is 1.99 times more volatile than Hotel Property Investments. It trades about 0.02 of its total potential returns per unit of risk. Hotel Property Investments is currently generating about 0.11 per unit of volatility. If you would invest 267.00 in Hotel Property Investments on October 18, 2024 and sell it today you would earn a total of 108.00 from holding Hotel Property Investments or generate 40.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COAST ENTERTAINMENT HOLDINGS vs. Hotel Property Investments
Performance |
| Timeline |
| COAST ENTERTAINMENT |
| Hotel Property Inves |
COAST ENTERTAINMENT and Hotel Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COAST ENTERTAINMENT and Hotel Property
The main advantage of trading using opposite COAST ENTERTAINMENT and Hotel Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COAST ENTERTAINMENT position performs unexpectedly, Hotel Property 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 Hotel Property will offset losses from the drop in Hotel Property's long position.| COAST ENTERTAINMENT vs. Iron Road | COAST ENTERTAINMENT vs. Duxton Broadacre Farms | COAST ENTERTAINMENT vs. Hutchison Telecommunications | COAST ENTERTAINMENT vs. Actinogen Medical |
| Hotel Property vs. Diversified United Investment | Hotel Property vs. DY6 Metals | Hotel Property vs. Truscott Mining Corp | Hotel Property vs. Hudson Investment 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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