Correlation Between Disney and Coastal Carolina
Can any of the company-specific risk be diversified away by investing in both Disney and Coastal Carolina 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 Disney and Coastal Carolina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Coastal Carolina Bancshares, you can compare the effects of market volatilities on Disney and Coastal Carolina 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 Disney with a short position of Coastal Carolina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Coastal Carolina.
Diversification Opportunities for Disney and Coastal Carolina
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Disney and Coastal is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Coastal Carolina Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Carolina Ban and Disney 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 Walt Disney are associated (or correlated) with Coastal Carolina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Carolina Ban has no effect on the direction of Disney i.e., Disney and Coastal Carolina go up and down completely randomly.
Pair Corralation between Disney and Coastal Carolina
Considering the 90-day investment horizon Walt Disney is expected to generate 1.38 times more return on investment than Coastal Carolina. However, Disney is 1.38 times more volatile than Coastal Carolina Bancshares. It trades about 0.51 of its potential returns per unit of risk. Coastal Carolina Bancshares is currently generating about 0.36 per unit of risk. If you would invest 9,620 in Walt Disney on September 1, 2024 and sell it today you would earn a total of 2,127 from holding Walt Disney or generate 22.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. Coastal Carolina Bancshares
Performance |
| Timeline |
| Walt Disney |
| Coastal Carolina Ban |
Disney and Coastal Carolina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and Coastal Carolina
The main advantage of trading using opposite Disney and Coastal Carolina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Coastal Carolina 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 Coastal Carolina will offset losses from the drop in Coastal Carolina's long position.| Disney vs. ADTRAN Inc | Disney vs. Belden Inc | Disney vs. ADC Therapeutics SA | Disney vs. Comtech Telecommunications Corp |
| Coastal Carolina vs. First Bankers Trustshares | Coastal Carolina vs. Greenville Federal Financial | Coastal Carolina vs. First Ottawa Bancshares | Coastal Carolina vs. Citizens Bancorp Investment |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |