Correlation Between Lindian Resources and Nine Entertainment
Can any of the company-specific risk be diversified away by investing in both Lindian Resources 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 Lindian Resources and Nine Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindian Resources and Nine Entertainment Co, you can compare the effects of market volatilities on Lindian Resources 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 Lindian Resources with a short position of Nine Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindian Resources and Nine Entertainment.
Diversification Opportunities for Lindian Resources and Nine Entertainment
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lindian and Nine is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lindian Resources and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment and Lindian Resources 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 Lindian Resources 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 Lindian Resources i.e., Lindian Resources and Nine Entertainment go up and down completely randomly.
Pair Corralation between Lindian Resources and Nine Entertainment
Assuming the 90 days trading horizon Lindian Resources is expected to under-perform the Nine Entertainment. In addition to that, Lindian Resources is 3.16 times more volatile than Nine Entertainment Co. It trades about -0.06 of its total potential returns per unit of risk. Nine Entertainment Co is currently generating about 0.21 per unit of volatility. If you would invest 117.00 in Nine Entertainment Co on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Nine Entertainment Co or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lindian Resources vs. Nine Entertainment Co
Performance |
| Timeline |
| Lindian Resources |
| Nine Entertainment |
Lindian Resources and Nine Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindian Resources and Nine Entertainment
The main advantage of trading using opposite Lindian Resources and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindian Resources 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.| Lindian Resources vs. Northern Star Resources | Lindian Resources vs. Evolution Mining | Lindian Resources vs. Bluescope Steel | Lindian Resources vs. Sandfire Resources NL |
| Nine Entertainment vs. Audio Pixels Holdings | Nine Entertainment vs. Norwest Minerals | Nine Entertainment vs. Lindian Resources | Nine Entertainment vs. Chilwa Minerals Limited |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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