Correlation Between Strickland Metals and COAST ENTERTAINMENT

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

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

Diversification Opportunities for Strickland Metals and COAST ENTERTAINMENT

0.47

Correlation Coefficient

Strickland Metals  COAST ENTERTAINMENT

Very weak diversification

The 3 months correlation between Strickland and COAST is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Strickland Metals and COAST ENTERTAINMENT HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COAST ENTERTAINMENT and Strickland Metals 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 Strickland Metals 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 Strickland Metals i.e., Strickland Metals and COAST ENTERTAINMENT go up and down completely randomly.

Pair Corralation between Strickland Metals and COAST ENTERTAINMENT

Assuming the 90 days trading horizon Strickland Metals is expected to under-perform the COAST ENTERTAINMENT. In addition to that, Strickland Metals is 2.11 times more volatile than COAST ENTERTAINMENT HOLDINGS. It trades about -0.21 of its total potential returns per unit of risk. COAST ENTERTAINMENT HOLDINGS is currently generating about -0.07 per unit of volatility. If you would invest  48.00  in COAST ENTERTAINMENT HOLDINGS on October 15, 2024 and sell it today you would lose (1.00) from holding COAST ENTERTAINMENT HOLDINGS or give up 2.08% of portfolio value over 90 days.

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

Strickland Metals  vs.  COAST ENTERTAINMENT HOLDINGS

Strickland Metals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Strickland Metals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward-looking signals, Strickland Metals may actually be approaching a critical reversion point that can send shares even higher in February 2025.

COAST ENTERTAINMENT

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in COAST ENTERTAINMENT HOLDINGS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, COAST ENTERTAINMENT is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Strickland Metals and COAST ENTERTAINMENT

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

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.