Correlation Between Air New and Nine Entertainment
Can any of the company-specific risk be diversified away by investing in both Air New and Nine 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 Air New and Nine Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air New Zealand and Nine Entertainment Co, you can compare the effects of market volatilities on Air New and Nine 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 Air New with a short position of Nine Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and Nine Entertainment.
Diversification Opportunities for Air New and Nine Entertainment
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Nine is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment and Air New 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 Air New Zealand are associated (or correlated) with Nine Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Entertainment has no effect on the direction of Air New i.e., Air New and Nine Entertainment go up and down completely randomly.
Pair Corralation between Air New and Nine Entertainment
Assuming the 90 days trading horizon Air New is expected to generate 1.66 times less return on investment than Nine Entertainment. But when comparing it to its historical volatility, Air New Zealand is 1.39 times less risky than Nine Entertainment. It trades about 0.25 of its potential returns per unit of risk. Nine Entertainment Co is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 114.00 in Nine Entertainment Co on September 15, 2024 and sell it today you would earn a total of 12.00 from holding Nine Entertainment Co or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air New Zealand vs. Nine Entertainment Co
Performance |
| Timeline |
| Air New Zealand |
| Nine Entertainment |
Air New and Nine Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air New and Nine Entertainment
The main advantage of trading using opposite Air New and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air New position performs unexpectedly, Nine 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 Nine Entertainment will offset losses from the drop in Nine Entertainment's long position.| Air New vs. Dicker Data | Air New vs. Mirrabooka Investments | Air New vs. Australian Strategic Materials | Air New vs. Diversified United Investment |
| Nine Entertainment vs. Air New Zealand | Nine Entertainment vs. Perseus Mining | Nine Entertainment vs. Sky Metals | Nine Entertainment vs. Aeon Metals |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |