Correlation Between COAST ENTERTAINMENT and Farm Pride

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

Diversification Opportunities for COAST ENTERTAINMENT and Farm Pride

-0.72

Correlation Coefficient

COAST ENTERTAINMENT  Farm Pride

Pay attention - limited upside

The 3 months correlation between COAST and Farm is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and Farm Pride Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farm Pride Foods 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 Farm Pride. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farm Pride Foods has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and Farm Pride go up and down completely randomly.

Pair Corralation between COAST ENTERTAINMENT and Farm Pride

Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to under-perform the Farm Pride. But the stock apears to be less risky and, when comparing its historical volatility, COAST ENTERTAINMENT HOLDINGS is 2.75 times less risky than Farm Pride. The stock trades about -0.12 of its potential returns per unit of risk. The Farm Pride Foods is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Farm Pride Foods on December 21, 2024 and sell it today you would earn a total of  9.00  from holding Farm Pride Foods or generate 69.23% 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.  Farm Pride Foods

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.

Farm Pride Foods

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Farm Pride Foods are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Farm Pride unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COAST ENTERTAINMENT and Farm Pride

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

The idea behind COAST ENTERTAINMENT HOLDINGS and Farm Pride Foods 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 Transaction History module to view history of all your transactions and understand their impact on performance.