Correlation Between Nine Entertainment and Carlton Investments
Can any of the company-specific risk be diversified away by investing in both Nine Entertainment and Carlton Investments 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 Nine Entertainment and Carlton Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nine Entertainment Co and Carlton Investments, you can compare the effects of market volatilities on Nine Entertainment and Carlton Investments 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 Nine Entertainment with a short position of Carlton Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Entertainment and Carlton Investments.
Diversification Opportunities for Nine Entertainment and Carlton Investments
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nine and Carlton is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nine Entertainment Co and Carlton Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlton Investments and Nine Entertainment 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 Nine Entertainment Co are associated (or correlated) with Carlton Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlton Investments has no effect on the direction of Nine Entertainment i.e., Nine Entertainment and Carlton Investments go up and down completely randomly.
Pair Corralation between Nine Entertainment and Carlton Investments
Assuming the 90 days trading horizon Nine Entertainment Co is expected to generate 1.6 times more return on investment than Carlton Investments. However, Nine Entertainment is 1.6 times more volatile than Carlton Investments. It trades about 0.08 of its potential returns per unit of risk. Carlton Investments is currently generating about -0.02 per unit of risk. If you would invest 126.00 in Nine Entertainment Co on October 14, 2024 and sell it today you would earn a total of 3.00 from holding Nine Entertainment Co or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Entertainment Co vs. Carlton Investments
Performance |
| Timeline |
| Nine Entertainment |
| Carlton Investments |
Nine Entertainment and Carlton Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Entertainment and Carlton Investments
The main advantage of trading using opposite Nine Entertainment and Carlton Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Entertainment position performs unexpectedly, Carlton Investments 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 Carlton Investments will offset losses from the drop in Carlton Investments' long position.| Nine Entertainment vs. A1 Investments Resources | Nine Entertainment vs. Premier Investments | Nine Entertainment vs. Pinnacle Investment Management | Nine Entertainment vs. MFF Capital Investments |
| Carlton Investments vs. oOhMedia | Carlton Investments vs. Nine Entertainment Co | Carlton Investments vs. TPG Telecom | Carlton Investments vs. Oneview Healthcare PLC |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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