Correlation Between Nine Entertainment and FireFly Metals
Can any of the company-specific risk be diversified away by investing in both Nine Entertainment and FireFly Metals 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 FireFly Metals 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 FireFly Metals, you can compare the effects of market volatilities on Nine Entertainment and FireFly Metals 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 FireFly Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Entertainment and FireFly Metals.
Diversification Opportunities for Nine Entertainment and FireFly Metals
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nine and FireFly is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nine Entertainment Co and FireFly Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FireFly Metals 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 FireFly Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FireFly Metals has no effect on the direction of Nine Entertainment i.e., Nine Entertainment and FireFly Metals go up and down completely randomly.
Pair Corralation between Nine Entertainment and FireFly Metals
Assuming the 90 days trading horizon Nine Entertainment Co is expected to under-perform the FireFly Metals. But the stock apears to be less risky and, when comparing its historical volatility, Nine Entertainment Co is 2.79 times less risky than FireFly Metals. The stock trades about -0.02 of its potential returns per unit of risk. The FireFly Metals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 92.00 in FireFly Metals on October 11, 2024 and sell it today you would earn a total of 4.00 from holding FireFly Metals or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Entertainment Co vs. FireFly Metals
Performance |
| Timeline |
| Nine Entertainment |
| FireFly Metals |
Nine Entertainment and FireFly Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Entertainment and FireFly Metals
The main advantage of trading using opposite Nine Entertainment and FireFly Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Entertainment position performs unexpectedly, FireFly Metals 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 FireFly Metals will offset losses from the drop in FireFly Metals' long position.| Nine Entertainment vs. Centrex Metals | Nine Entertainment vs. Falcon Metals | Nine Entertainment vs. Computershare | Nine Entertainment vs. ABACUS STORAGE KING |
| FireFly Metals vs. Truscott Mining Corp | FireFly Metals vs. ACDC Metals | FireFly Metals vs. Black Rock Mining | FireFly Metals vs. Nine Entertainment Co |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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