Correlation Between Hotel Property and Nine Entertainment
Can any of the company-specific risk be diversified away by investing in both Hotel Property 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 Hotel Property and Nine Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Property Investments and Nine Entertainment Co, you can compare the effects of market volatilities on Hotel Property 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 Hotel Property with a short position of Nine Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Nine Entertainment.
Diversification Opportunities for Hotel Property and Nine Entertainment
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hotel and Nine is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment and Hotel Property 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 Hotel Property Investments 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 Hotel Property i.e., Hotel Property and Nine Entertainment go up and down completely randomly.
Pair Corralation between Hotel Property and Nine Entertainment
Assuming the 90 days trading horizon Hotel Property Investments is expected to generate 0.78 times more return on investment than Nine Entertainment. However, Hotel Property Investments is 1.28 times less risky than Nine Entertainment. It trades about 0.12 of its potential returns per unit of risk. Nine Entertainment Co is currently generating about -0.07 per unit of risk. If you would invest 251.00 in Hotel Property Investments on August 29, 2024 and sell it today you would earn a total of 119.00 from holding Hotel Property Investments or generate 47.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Property Investments vs. Nine Entertainment Co
Performance |
| Timeline |
| Hotel Property Inves |
| Nine Entertainment |
Hotel Property and Nine Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Property and Nine Entertainment
The main advantage of trading using opposite Hotel Property and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property 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.| Hotel Property vs. Charter Hall Retail | Hotel Property vs. Australian Unity Office | Hotel Property vs. Champion Iron | Hotel Property vs. Ridley |
| Nine Entertainment vs. TTG Fintech | Nine Entertainment vs. Thorney Technologies | Nine Entertainment vs. Macquarie Technology Group | Nine Entertainment vs. Flagship Investments |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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