Correlation Between Platinum Asia and COAST ENTERTAINMENT

Can any of the company-specific risk be diversified away by investing in both Platinum Asia 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 Platinum Asia and COAST ENTERTAINMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Platinum Asia Investments and COAST ENTERTAINMENT HOLDINGS, you can compare the effects of market volatilities on Platinum Asia 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 Platinum Asia with a short position of COAST ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and COAST ENTERTAINMENT.

Diversification Opportunities for Platinum Asia and COAST ENTERTAINMENT

0.19

Correlation Coefficient

Platinum Asia  COAST ENTERTAINMENT

Average diversification

The 3 months correlation between Platinum and COAST is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and COAST ENTERTAINMENT HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COAST ENTERTAINMENT and Platinum Asia 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 Platinum Asia Investments 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 Platinum Asia i.e., Platinum Asia and COAST ENTERTAINMENT go up and down completely randomly.

Pair Corralation between Platinum Asia and COAST ENTERTAINMENT

Assuming the 90 days trading horizon Platinum Asia is expected to generate 32.93 times less return on investment than COAST ENTERTAINMENT. But when comparing it to its historical volatility, Platinum Asia Investments is 1.99 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 0.1 of returns per unit of risk over similar time horizon. If you would invest  44.00  in COAST ENTERTAINMENT HOLDINGS on September 27, 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

Platinum Asia Investments  vs.  COAST ENTERTAINMENT HOLDINGS

Platinum Asia Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Platinum Asia Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Platinum Asia is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

COAST ENTERTAINMENT

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in COAST ENTERTAINMENT HOLDINGS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical indicators, COAST ENTERTAINMENT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Platinum Asia and COAST ENTERTAINMENT

The main advantage of trading using opposite Platinum Asia and COAST ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia 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.

The idea behind Platinum Asia Investments and COAST ENTERTAINMENT HOLDINGS 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.