Correlation Between COAST ENTERTAINMENT and Skycity Entertainment
Can any of the company-specific risk be diversified away by investing in both COAST ENTERTAINMENT and Skycity 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 Skycity 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 Skycity Entertainment Group, you can compare the effects of market volatilities on COAST ENTERTAINMENT and Skycity 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 Skycity Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of COAST ENTERTAINMENT and Skycity Entertainment.
Diversification Opportunities for COAST ENTERTAINMENT and Skycity Entertainment
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COAST and Skycity is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and Skycity Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skycity 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 Skycity Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skycity Entertainment has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and Skycity Entertainment go up and down completely randomly.
Pair Corralation between COAST ENTERTAINMENT and Skycity Entertainment
Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to generate 1.0 times more return on investment than Skycity Entertainment. However, COAST ENTERTAINMENT is 1.0 times more volatile than Skycity Entertainment Group. It trades about -0.02 of its potential returns per unit of risk. Skycity Entertainment Group is currently generating about -0.03 per unit of risk. If you would invest 48.00 in COAST ENTERTAINMENT HOLDINGS on September 3, 2024 and sell it today you would lose (5.00) from holding COAST ENTERTAINMENT HOLDINGS or give up 10.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COAST ENTERTAINMENT HOLDINGS vs. Skycity Entertainment Group
Performance |
| Timeline |
| COAST ENTERTAINMENT |
| Skycity Entertainment |
COAST ENTERTAINMENT and Skycity Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COAST ENTERTAINMENT and Skycity Entertainment
The main advantage of trading using opposite COAST ENTERTAINMENT and Skycity Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COAST ENTERTAINMENT position performs unexpectedly, Skycity 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 Skycity Entertainment will offset losses from the drop in Skycity Entertainment's long position.| COAST ENTERTAINMENT vs. Viva Leisure | COAST ENTERTAINMENT vs. Toys R Us | COAST ENTERTAINMENT vs. Ecofibre | COAST ENTERTAINMENT vs. Champion Iron |
| Skycity Entertainment vs. Westpac Banking | Skycity Entertainment vs. Champion Iron | Skycity Entertainment vs. iShares Global Healthcare | Skycity Entertainment vs. Peel Mining |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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