Correlation Between Kip McGrath and COAST ENTERTAINMENT
Can any of the company-specific risk be diversified away by investing in both Kip McGrath and COAST 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 Kip McGrath and COAST ENTERTAINMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kip McGrath Education and COAST ENTERTAINMENT HOLDINGS, you can compare the effects of market volatilities on Kip McGrath and COAST 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 Kip McGrath with a short position of COAST ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kip McGrath and COAST ENTERTAINMENT.
Diversification Opportunities for Kip McGrath and COAST ENTERTAINMENT
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kip and COAST is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and COAST ENTERTAINMENT HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COAST ENTERTAINMENT and Kip McGrath 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 Kip McGrath Education are associated (or correlated) with COAST ENTERTAINMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COAST ENTERTAINMENT has no effect on the direction of Kip McGrath i.e., Kip McGrath and COAST ENTERTAINMENT go up and down completely randomly.
Pair Corralation between Kip McGrath and COAST ENTERTAINMENT
Assuming the 90 days trading horizon Kip McGrath Education is expected to generate 1.27 times more return on investment than COAST ENTERTAINMENT. However, Kip McGrath is 1.27 times more volatile than COAST ENTERTAINMENT HOLDINGS. It trades about 0.26 of its potential returns per unit of risk. COAST ENTERTAINMENT HOLDINGS is currently generating about -0.06 per unit of risk. If you would invest 41.00 in Kip McGrath Education on August 25, 2024 and sell it today you would earn a total of 5.00 from holding Kip McGrath Education or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kip McGrath Education vs. COAST ENTERTAINMENT HOLDINGS
Performance |
| Timeline |
| Kip McGrath Education |
| COAST ENTERTAINMENT |
Kip McGrath and COAST ENTERTAINMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kip McGrath and COAST ENTERTAINMENT
The main advantage of trading using opposite Kip McGrath and COAST ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kip McGrath position performs unexpectedly, COAST 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 COAST ENTERTAINMENT will offset losses from the drop in COAST ENTERTAINMENT's long position.| Kip McGrath vs. Aneka Tambang Tbk | Kip McGrath vs. BHP Group Limited | Kip McGrath vs. Rio Tinto | Kip McGrath vs. Macquarie Group Ltd |
| COAST ENTERTAINMENT vs. Ainsworth Game Technology | COAST ENTERTAINMENT vs. Bio Gene Technology | COAST ENTERTAINMENT vs. Kip McGrath Education | COAST ENTERTAINMENT vs. Land Homes Group |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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