Correlation Between COAST ENTERTAINMENT and FireFly Metals

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

Diversification Opportunities for COAST ENTERTAINMENT and FireFly Metals

-0.7

Correlation Coefficient

COAST ENTERTAINMENT  FireFly Metals

Excellent diversification

The 3 months correlation between COAST and FireFly is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and FireFly Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FireFly Metals 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 FireFly Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FireFly Metals has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and FireFly Metals go up and down completely randomly.

Pair Corralation between COAST ENTERTAINMENT and FireFly Metals

Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to under-perform the FireFly Metals. But the stock apears to be less risky and, when comparing its historical volatility, COAST ENTERTAINMENT HOLDINGS is 1.74 times less risky than FireFly Metals. The stock trades about -0.12 of its potential returns per unit of risk. The FireFly Metals is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  90.00  in FireFly Metals on December 30, 2024 and sell it today you would earn a total of  13.00  from holding FireFly Metals or generate 14.44% return on investment over 90 days.

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

COAST ENTERTAINMENT HOLDINGS  vs.  FireFly Metals

COAST ENTERTAINMENT

Risk-Adjusted Performance

Very Weak

Over the last 90 days COAST ENTERTAINMENT HOLDINGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

FireFly Metals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FireFly Metals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, FireFly Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COAST ENTERTAINMENT and FireFly Metals

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

The idea behind COAST ENTERTAINMENT HOLDINGS and FireFly Metals 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.