Correlation Between COAST ENTERTAINMENT and Xero
Can any of the company-specific risk be diversified away by investing in both COAST ENTERTAINMENT and Xero 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 Xero 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 Xero, you can compare the effects of market volatilities on COAST ENTERTAINMENT and Xero 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 Xero. Check out your portfolio center. Please also check ongoing floating volatility patterns of COAST ENTERTAINMENT and Xero.
Diversification Opportunities for COAST ENTERTAINMENT and Xero
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COAST and Xero is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and Xero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xero 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 Xero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xero has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and Xero go up and down completely randomly.
Pair Corralation between COAST ENTERTAINMENT and Xero
Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to under-perform the Xero. In addition to that, COAST ENTERTAINMENT is 1.15 times more volatile than Xero. It trades about -0.04 of its total potential returns per unit of risk. Xero is currently generating about 0.42 per unit of volatility. If you would invest 15,028 in Xero on September 4, 2024 and sell it today you would earn a total of 2,427 from holding Xero or generate 16.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COAST ENTERTAINMENT HOLDINGS vs. Xero
Performance |
| Timeline |
| COAST ENTERTAINMENT |
| Xero |
COAST ENTERTAINMENT and Xero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COAST ENTERTAINMENT and Xero
The main advantage of trading using opposite COAST ENTERTAINMENT and Xero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COAST ENTERTAINMENT position performs unexpectedly, Xero 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 Xero will offset losses from the drop in Xero's long position.| COAST ENTERTAINMENT vs. Viva Leisure | COAST ENTERTAINMENT vs. Toys R Us | COAST ENTERTAINMENT vs. Lendlease Group | COAST ENTERTAINMENT vs. Perseus Mining |
| Xero vs. Aneka Tambang Tbk | Xero vs. BHP Group Limited | Xero vs. Commonwealth Bank of | Xero vs. Commonwealth Bank of |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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