Correlation Between COAST ENTERTAINMENT and Nine Entertainment
Can any of the company-specific risk be diversified away by investing in both COAST ENTERTAINMENT and Nine Entertainment 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 Nine Entertainment 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 Nine Entertainment Co, you can compare the effects of market volatilities on COAST ENTERTAINMENT and Nine Entertainment 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 Nine Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of COAST ENTERTAINMENT and Nine Entertainment.
Diversification Opportunities for COAST ENTERTAINMENT and Nine Entertainment
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between COAST and Nine is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment 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 Nine Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Entertainment has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and Nine Entertainment go up and down completely randomly.
Pair Corralation between COAST ENTERTAINMENT and Nine Entertainment
Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to generate 1.45 times more return on investment than Nine Entertainment. However, COAST ENTERTAINMENT is 1.45 times more volatile than Nine Entertainment Co. It trades about 0.01 of its potential returns per unit of risk. Nine Entertainment Co is currently generating about -0.09 per unit of risk. If you would invest 46.00 in COAST ENTERTAINMENT HOLDINGS on August 25, 2024 and sell it today you would lose (2.00) from holding COAST ENTERTAINMENT HOLDINGS or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COAST ENTERTAINMENT HOLDINGS vs. Nine Entertainment Co
Performance |
| Timeline |
| COAST ENTERTAINMENT |
| Nine Entertainment |
COAST ENTERTAINMENT and Nine Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COAST ENTERTAINMENT and Nine Entertainment
The main advantage of trading using opposite COAST ENTERTAINMENT and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COAST ENTERTAINMENT position performs unexpectedly, Nine Entertainment 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 Nine Entertainment will offset losses from the drop in Nine Entertainment's long position.| COAST ENTERTAINMENT vs. Ainsworth Game Technology | COAST ENTERTAINMENT vs. Bio Gene Technology | COAST ENTERTAINMENT vs. Kip McGrath Education | COAST ENTERTAINMENT vs. Land Homes Group |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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