Correlation Between COAST ENTERTAINMENT and Insignia Financial
Can any of the company-specific risk be diversified away by investing in both COAST ENTERTAINMENT and Insignia Financial 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 Insignia Financial 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 Insignia Financial, you can compare the effects of market volatilities on COAST ENTERTAINMENT and Insignia Financial 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 Insignia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of COAST ENTERTAINMENT and Insignia Financial.
Diversification Opportunities for COAST ENTERTAINMENT and Insignia Financial
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COAST and Insignia is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and Insignia Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insignia Financial 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 Insignia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insignia Financial has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and Insignia Financial go up and down completely randomly.
Pair Corralation between COAST ENTERTAINMENT and Insignia Financial
Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to generate 0.8 times more return on investment than Insignia Financial. However, COAST ENTERTAINMENT HOLDINGS is 1.25 times less risky than Insignia Financial. It trades about -0.06 of its potential returns per unit of risk. Insignia Financial is currently generating about -0.11 per unit of risk. If you would invest 45.00 in COAST ENTERTAINMENT HOLDINGS on August 30, 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COAST ENTERTAINMENT HOLDINGS vs. Insignia Financial
Performance |
| Timeline |
| COAST ENTERTAINMENT |
| Insignia Financial |
COAST ENTERTAINMENT and Insignia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COAST ENTERTAINMENT and Insignia Financial
The main advantage of trading using opposite COAST ENTERTAINMENT and Insignia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COAST ENTERTAINMENT position performs unexpectedly, Insignia Financial 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 Insignia Financial will offset losses from the drop in Insignia Financial's long position.| COAST ENTERTAINMENT vs. ABACUS STORAGE KING | COAST ENTERTAINMENT vs. Stelar Metals | COAST ENTERTAINMENT vs. Centuria Industrial Reit | COAST ENTERTAINMENT vs. Thorney Technologies |
| Insignia Financial vs. Renascor Resources | Insignia Financial vs. Venus Metals | Insignia Financial vs. Havilah Resources | Insignia Financial vs. Asara Resources |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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