Correlation Between Xero and COAST ENTERTAINMENT
Can any of the company-specific risk be diversified away by investing in both Xero 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 Xero and COAST ENTERTAINMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xero and COAST ENTERTAINMENT HOLDINGS, you can compare the effects of market volatilities on Xero 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 Xero with a short position of COAST ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xero and COAST ENTERTAINMENT.
Diversification Opportunities for Xero and COAST ENTERTAINMENT
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xero and COAST is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Xero and COAST ENTERTAINMENT HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COAST ENTERTAINMENT and Xero 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 Xero 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 Xero i.e., Xero and COAST ENTERTAINMENT go up and down completely randomly.
Pair Corralation between Xero and COAST ENTERTAINMENT
Assuming the 90 days trading horizon Xero is expected to generate 0.69 times more return on investment than COAST ENTERTAINMENT. However, Xero is 1.45 times less risky than COAST ENTERTAINMENT. It trades about 0.12 of its potential returns per unit of risk. COAST ENTERTAINMENT HOLDINGS is currently generating about 0.01 per unit of risk. If you would invest 10,437 in Xero on September 4, 2024 and sell it today you would earn a total of 7,018 from holding Xero or generate 67.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xero vs. COAST ENTERTAINMENT HOLDINGS
Performance |
| Timeline |
| Xero |
| COAST ENTERTAINMENT |
Xero and COAST ENTERTAINMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xero and COAST ENTERTAINMENT
The main advantage of trading using opposite Xero and COAST ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xero 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.| Xero vs. Aneka Tambang Tbk | Xero vs. BHP Group Limited | Xero vs. Commonwealth Bank of | Xero vs. Commonwealth Bank of |
| COAST ENTERTAINMENT vs. Viva Leisure | COAST ENTERTAINMENT vs. Toys R Us | COAST ENTERTAINMENT vs. Lendlease Group | COAST ENTERTAINMENT vs. Perseus 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |