Correlation Between COAST ENTERTAINMENT and Ironbark Capital
Can any of the company-specific risk be diversified away by investing in both COAST ENTERTAINMENT and Ironbark Capital 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 Ironbark Capital 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 Ironbark Capital, you can compare the effects of market volatilities on COAST ENTERTAINMENT and Ironbark Capital 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 Ironbark Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of COAST ENTERTAINMENT and Ironbark Capital.
Diversification Opportunities for COAST ENTERTAINMENT and Ironbark Capital
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between COAST and Ironbark is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and Ironbark Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ironbark Capital 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 Ironbark Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ironbark Capital has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and Ironbark Capital go up and down completely randomly.
Pair Corralation between COAST ENTERTAINMENT and Ironbark Capital
Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to generate 3.64 times more return on investment than Ironbark Capital. However, COAST ENTERTAINMENT is 3.64 times more volatile than Ironbark Capital. It trades about 0.06 of its potential returns per unit of risk. Ironbark Capital is currently generating about -0.04 per unit of risk. If you would invest 45.00 in COAST ENTERTAINMENT HOLDINGS on September 24, 2024 and sell it today you would earn a total of 4.00 from holding COAST ENTERTAINMENT HOLDINGS or generate 8.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.48% |
Values | Daily Returns |
COAST ENTERTAINMENT HOLDINGS vs. Ironbark Capital
Performance |
Timeline |
COAST ENTERTAINMENT |
Ironbark Capital |
COAST ENTERTAINMENT and Ironbark Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with COAST ENTERTAINMENT and Ironbark Capital
The main advantage of trading using opposite COAST ENTERTAINMENT and Ironbark Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COAST ENTERTAINMENT position performs unexpectedly, Ironbark Capital 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 Ironbark Capital will offset losses from the drop in Ironbark Capital's long position.COAST ENTERTAINMENT vs. Emetals | COAST ENTERTAINMENT vs. National Storage REIT | COAST ENTERTAINMENT vs. ABACUS STORAGE KING | COAST ENTERTAINMENT vs. Aurelia Metals |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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