Correlation Between COAST ENTERTAINMENT and Qantas Airways
Can any of the company-specific risk be diversified away by investing in both COAST ENTERTAINMENT and Qantas Airways 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 Qantas Airways 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 Qantas Airways, you can compare the effects of market volatilities on COAST ENTERTAINMENT and Qantas Airways 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 Qantas Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of COAST ENTERTAINMENT and Qantas Airways.
Diversification Opportunities for COAST ENTERTAINMENT and Qantas Airways
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COAST and Qantas is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and Qantas Airways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qantas Airways 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 Qantas Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qantas Airways has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and Qantas Airways go up and down completely randomly.
Pair Corralation between COAST ENTERTAINMENT and Qantas Airways
Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to generate 1.33 times more return on investment than Qantas Airways. However, COAST ENTERTAINMENT is 1.33 times more volatile than Qantas Airways. It trades about 0.11 of its potential returns per unit of risk. Qantas Airways is currently generating about 0.08 per unit of risk. If you would invest 47.00 in COAST ENTERTAINMENT HOLDINGS on October 11, 2024 and sell it today you would earn a total of 2.00 from holding COAST ENTERTAINMENT HOLDINGS or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
COAST ENTERTAINMENT HOLDINGS vs. Qantas Airways
Performance |
| Timeline |
| COAST ENTERTAINMENT |
| Qantas Airways |
COAST ENTERTAINMENT and Qantas Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COAST ENTERTAINMENT and Qantas Airways
The main advantage of trading using opposite COAST ENTERTAINMENT and Qantas Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COAST ENTERTAINMENT position performs unexpectedly, Qantas Airways 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 Qantas Airways will offset losses from the drop in Qantas Airways' long position.| COAST ENTERTAINMENT vs. FireFly Metals | COAST ENTERTAINMENT vs. Macquarie Technology Group | COAST ENTERTAINMENT vs. Aeon Metals | COAST ENTERTAINMENT vs. Genetic Technologies |
| Qantas Airways vs. MetalsGrove Mining | Qantas Airways vs. M3 Mining | Qantas Airways vs. Perseus Mining | Qantas Airways vs. COAST ENTERTAINMENT HOLDINGS |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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