Correlation Between COAST ENTERTAINMENT and Aneka Tambang

Can any of the company-specific risk be diversified away by investing in both COAST ENTERTAINMENT and Aneka Tambang 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 Aneka Tambang 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 Aneka Tambang Tbk, you can compare the effects of market volatilities on COAST ENTERTAINMENT and Aneka Tambang 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 Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of COAST ENTERTAINMENT and Aneka Tambang.

Diversification Opportunities for COAST ENTERTAINMENT and Aneka Tambang

0.06

Correlation Coefficient

COAST ENTERTAINMENT  Aneka Tambang

Significant diversification

The 3 months correlation between COAST and Aneka is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and Aneka Tambang Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aneka Tambang Tbk 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 Aneka Tambang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aneka Tambang Tbk has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and Aneka Tambang go up and down completely randomly.

Pair Corralation between COAST ENTERTAINMENT and Aneka Tambang

Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to generate 2.25 times more return on investment than Aneka Tambang. However, COAST ENTERTAINMENT is 2.25 times more volatile than Aneka Tambang Tbk. It trades about 0.21 of its potential returns per unit of risk. Aneka Tambang Tbk is currently generating about 0.32 per unit of risk. If you would invest  44.00  in COAST ENTERTAINMENT HOLDINGS on September 28, 2024 and sell it today you would earn a total of  6.00  from holding COAST ENTERTAINMENT HOLDINGS or generate 13.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

COAST ENTERTAINMENT HOLDINGS  vs.  Aneka Tambang Tbk

COAST ENTERTAINMENT

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in COAST ENTERTAINMENT HOLDINGS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical indicators, COAST ENTERTAINMENT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aneka Tambang Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aneka Tambang Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with COAST ENTERTAINMENT and Aneka Tambang

The main advantage of trading using opposite COAST ENTERTAINMENT and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COAST ENTERTAINMENT position performs unexpectedly, Aneka Tambang 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 Aneka Tambang will offset losses from the drop in Aneka Tambang's long position.

The idea behind COAST ENTERTAINMENT HOLDINGS and Aneka Tambang Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.