Correlation Between Global Data and Nine Entertainment
Can any of the company-specific risk be diversified away by investing in both Global Data 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 Global Data and Nine Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Data Centre and Nine Entertainment Co, you can compare the effects of market volatilities on Global Data 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 Global Data with a short position of Nine Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Data and Nine Entertainment.
Diversification Opportunities for Global Data and Nine Entertainment
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Nine is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Global Data Centre and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment and Global Data 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 Global Data Centre 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 Global Data i.e., Global Data and Nine Entertainment go up and down completely randomly.
Pair Corralation between Global Data and Nine Entertainment
Assuming the 90 days trading horizon Global Data is expected to generate 2.4 times less return on investment than Nine Entertainment. But when comparing it to its historical volatility, Global Data Centre is 5.62 times less risky than Nine Entertainment. It trades about 0.31 of its potential returns per unit of risk. Nine Entertainment Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 121.00 in Nine Entertainment Co on September 19, 2024 and sell it today you would earn a total of 4.00 from holding Nine Entertainment Co or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Data Centre vs. Nine Entertainment Co
Performance |
| Timeline |
| Global Data Centre |
| Nine Entertainment |
Global Data and Nine Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Data and Nine Entertainment
The main advantage of trading using opposite Global Data and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Data 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.| Global Data vs. Hudson Investment Group | Global Data vs. Skycity Entertainment Group | Global Data vs. Infomedia | Global Data vs. AiMedia Technologies |
| Nine Entertainment vs. Truscott Mining Corp | Nine Entertainment vs. Peel Mining | Nine Entertainment vs. Hansen Technologies | Nine Entertainment vs. Perseus Mining |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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