Correlation Between Nine Entertainment and Global Health
Can any of the company-specific risk be diversified away by investing in both Nine Entertainment and Global Health 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 Global Health 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 Global Health, you can compare the effects of market volatilities on Nine Entertainment and Global Health 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 Global Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Entertainment and Global Health.
Diversification Opportunities for Nine Entertainment and Global Health
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nine and Global is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nine Entertainment Co and Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Health 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 Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health has no effect on the direction of Nine Entertainment i.e., Nine Entertainment and Global Health go up and down completely randomly.
Pair Corralation between Nine Entertainment and Global Health
Assuming the 90 days trading horizon Nine Entertainment Co is expected to generate 0.49 times more return on investment than Global Health. However, Nine Entertainment Co is 2.06 times less risky than Global Health. It trades about 0.3 of its potential returns per unit of risk. Global Health is currently generating about 0.02 per unit of risk. If you would invest 114.00 in Nine Entertainment Co on September 15, 2024 and sell it today you would earn a total of 12.00 from holding Nine Entertainment Co or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Entertainment Co vs. Global Health
Performance |
| Timeline |
| Nine Entertainment |
| Global Health |
Nine Entertainment and Global Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Entertainment and Global Health
The main advantage of trading using opposite Nine Entertainment and Global Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Entertainment position performs unexpectedly, Global Health 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 Global Health will offset losses from the drop in Global Health's long position.| Nine Entertainment vs. Air New Zealand | Nine Entertainment vs. Perseus Mining | Nine Entertainment vs. Sky Metals | Nine Entertainment vs. Aeon Metals |
| Global Health vs. oOhMedia | Global Health vs. Nine Entertainment Co | Global Health vs. WiseTech Global Limited | Global Health vs. Australian Agricultural |
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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