Correlation Between Retail Food and COAST ENTERTAINMENT
Can any of the company-specific risk be diversified away by investing in both Retail Food 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 Retail Food and COAST ENTERTAINMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Food Group and COAST ENTERTAINMENT HOLDINGS, you can compare the effects of market volatilities on Retail Food 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 Retail Food with a short position of COAST ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Food and COAST ENTERTAINMENT.
Diversification Opportunities for Retail Food and COAST ENTERTAINMENT
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Retail and COAST is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Retail Food Group and COAST ENTERTAINMENT HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COAST ENTERTAINMENT and Retail Food 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 Retail Food Group 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 Retail Food i.e., Retail Food and COAST ENTERTAINMENT go up and down completely randomly.
Pair Corralation between Retail Food and COAST ENTERTAINMENT
Assuming the 90 days trading horizon Retail Food Group is expected to generate 0.99 times more return on investment than COAST ENTERTAINMENT. However, Retail Food Group is 1.01 times less risky than COAST ENTERTAINMENT. It trades about 0.01 of its potential returns per unit of risk. COAST ENTERTAINMENT HOLDINGS is currently generating about -0.03 per unit of risk. If you would invest 7.20 in Retail Food Group on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Retail Food Group 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 |
Retail Food Group vs. COAST ENTERTAINMENT HOLDINGS
Performance |
| Timeline |
| Retail Food Group |
| COAST ENTERTAINMENT |
Retail Food and COAST ENTERTAINMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Food and COAST ENTERTAINMENT
The main advantage of trading using opposite Retail Food and COAST ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Food 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.| Retail Food vs. Westpac Banking | Retail Food vs. Champion Iron | Retail Food vs. iShares Global Healthcare | Retail Food vs. Peel Mining |
| COAST ENTERTAINMENT vs. Viva Leisure | COAST ENTERTAINMENT vs. Toys R Us | COAST ENTERTAINMENT vs. Ecofibre | COAST ENTERTAINMENT vs. Champion Iron |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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