Correlation Between COAST ENTERTAINMENT and Sims

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

Diversification Opportunities for COAST ENTERTAINMENT and Sims

-0.8

Correlation Coefficient

COAST ENTERTAINMENT  Sims

Pay attention - limited upside

The 3 months correlation between COAST and Sims is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding COAST ENTERTAINMENT HOLDINGS and Sims in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sims 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 Sims. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sims has no effect on the direction of COAST ENTERTAINMENT i.e., COAST ENTERTAINMENT and Sims go up and down completely randomly.

Pair Corralation between COAST ENTERTAINMENT and Sims

Assuming the 90 days trading horizon COAST ENTERTAINMENT HOLDINGS is expected to under-perform the Sims. In addition to that, COAST ENTERTAINMENT is 1.25 times more volatile than Sims. It trades about -0.12 of its total potential returns per unit of risk. Sims is currently generating about 0.24 per unit of volatility. If you would invest  1,187  in Sims on December 28, 2024 and sell it today you would earn a total of  330.00  from holding Sims or generate 27.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

COAST ENTERTAINMENT HOLDINGS  vs.  Sims

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.

Sims

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sims are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Sims unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COAST ENTERTAINMENT and Sims

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

The idea behind COAST ENTERTAINMENT HOLDINGS and Sims 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.