Correlation Between COAST ENTERTAINMENT and Star Entertainment
Can any of the company-specific risk be diversified away by investing in both COAST ENTERTAINMENT and Star 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 Star 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 Star Entertainment Group, you can compare the effects of market volatilities on COAST ENTERTAINMENT and Star 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 Star Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of COAST ENTERTAINMENT and Star Entertainment.
Diversification Opportunities for COAST ENTERTAINMENT and Star Entertainment
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COAST and Star is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and Star Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star 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 Star Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Entertainment has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and Star Entertainment go up and down completely randomly.
Pair Corralation between COAST ENTERTAINMENT and Star Entertainment
Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to generate 0.23 times more return on investment than Star Entertainment. However, COAST ENTERTAINMENT HOLDINGS is 4.35 times less risky than Star Entertainment. It trades about 0.01 of its potential returns per unit of risk. Star Entertainment Group is currently generating about -0.19 per unit of risk. If you would invest 49.00 in COAST ENTERTAINMENT HOLDINGS on October 12, 2024 and sell it today you would earn a total of 0.00 from holding COAST ENTERTAINMENT HOLDINGS or generate 0.0% 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. Star Entertainment Group
Performance |
| Timeline |
| COAST ENTERTAINMENT |
| Star Entertainment |
COAST ENTERTAINMENT and Star Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COAST ENTERTAINMENT and Star Entertainment
The main advantage of trading using opposite COAST ENTERTAINMENT and Star Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COAST ENTERTAINMENT position performs unexpectedly, Star 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 Star Entertainment will offset losses from the drop in Star Entertainment's long position.| COAST ENTERTAINMENT vs. FireFly Metals | COAST ENTERTAINMENT vs. Macquarie Technology Group | COAST ENTERTAINMENT vs. Aeon Metals | COAST ENTERTAINMENT vs. Genetic Technologies |
| Star Entertainment vs. Clime Investment Management | Star Entertainment vs. Apiam Animal Health | Star Entertainment vs. Austco Healthcare | Star Entertainment vs. Sonic Healthcare |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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