Correlation Between Nanosonics and Nine Entertainment
Can any of the company-specific risk be diversified away by investing in both Nanosonics 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 Nanosonics and Nine Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanosonics and Nine Entertainment Co, you can compare the effects of market volatilities on Nanosonics 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 Nanosonics with a short position of Nine Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanosonics and Nine Entertainment.
Diversification Opportunities for Nanosonics and Nine Entertainment
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nanosonics and Nine is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nanosonics and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment and Nanosonics 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 Nanosonics 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 Nanosonics i.e., Nanosonics and Nine Entertainment go up and down completely randomly.
Pair Corralation between Nanosonics and Nine Entertainment
Assuming the 90 days trading horizon Nanosonics is expected to generate 2.04 times more return on investment than Nine Entertainment. However, Nanosonics is 2.04 times more volatile than Nine Entertainment Co. It trades about -0.02 of its potential returns per unit of risk. Nine Entertainment Co is currently generating about -0.08 per unit of risk. If you would invest 448.00 in Nanosonics on September 12, 2024 and sell it today you would lose (144.00) from holding Nanosonics or give up 32.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanosonics vs. Nine Entertainment Co
Performance |
| Timeline |
| Nanosonics |
| Nine Entertainment |
Nanosonics and Nine Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanosonics and Nine Entertainment
The main advantage of trading using opposite Nanosonics and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanosonics 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.The idea behind Nanosonics and Nine Entertainment Co 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.| Nine Entertainment vs. REGAL ASIAN INVESTMENTS | Nine Entertainment vs. Step One Clothing | Nine Entertainment vs. Hotel Property Investments | Nine Entertainment vs. Australian United Investment |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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