Correlation Between Nine Entertainment and Globe Metals
Can any of the company-specific risk be diversified away by investing in both Nine Entertainment and Globe 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 Globe 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 Globe Metals Mining, you can compare the effects of market volatilities on Nine Entertainment and Globe 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 Globe Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Entertainment and Globe Metals.
Diversification Opportunities for Nine Entertainment and Globe Metals
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nine and Globe is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nine Entertainment Co and Globe Metals Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Metals Mining 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 Globe Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Metals Mining has no effect on the direction of Nine Entertainment i.e., Nine Entertainment and Globe Metals go up and down completely randomly.
Pair Corralation between Nine Entertainment and Globe Metals
Assuming the 90 days trading horizon Nine Entertainment Co is expected to under-perform the Globe Metals. But the stock apears to be less risky and, when comparing its historical volatility, Nine Entertainment Co is 3.69 times less risky than Globe Metals. The stock trades about -0.03 of its potential returns per unit of risk. The Globe Metals Mining is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7.06 in Globe Metals Mining on October 14, 2024 and sell it today you would lose (2.96) from holding Globe Metals Mining or give up 41.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Entertainment Co vs. Globe Metals Mining
Performance |
| Timeline |
| Nine Entertainment |
| Globe Metals Mining |
Nine Entertainment and Globe Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Entertainment and Globe Metals
The main advantage of trading using opposite Nine Entertainment and Globe Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Entertainment position performs unexpectedly, Globe 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 Globe Metals will offset losses from the drop in Globe Metals' 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 |
| Globe Metals vs. Skycity Entertainment Group | Globe Metals vs. COAST ENTERTAINMENT HOLDINGS | Globe Metals vs. Sports Entertainment Group | Globe 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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