Correlation Between Nine Entertainment and Greenvale Energy
Can any of the company-specific risk be diversified away by investing in both Nine Entertainment and Greenvale Energy 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 Greenvale Energy 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 Greenvale Energy, you can compare the effects of market volatilities on Nine Entertainment and Greenvale Energy 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 Greenvale Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Entertainment and Greenvale Energy.
Diversification Opportunities for Nine Entertainment and Greenvale Energy
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nine and Greenvale is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nine Entertainment Co and Greenvale Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenvale Energy 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 Greenvale Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenvale Energy has no effect on the direction of Nine Entertainment i.e., Nine Entertainment and Greenvale Energy go up and down completely randomly.
Pair Corralation between Nine Entertainment and Greenvale Energy
Assuming the 90 days trading horizon Nine Entertainment Co is expected to generate 0.26 times more return on investment than Greenvale Energy. However, Nine Entertainment Co is 3.78 times less risky than Greenvale Energy. It trades about -0.08 of its potential returns per unit of risk. Greenvale Energy is currently generating about -0.03 per unit of risk. If you would invest 186.00 in Nine Entertainment Co on September 3, 2024 and sell it today you would lose (61.00) from holding Nine Entertainment Co or give up 32.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Entertainment Co vs. Greenvale Energy
Performance |
| Timeline |
| Nine Entertainment |
| Greenvale Energy |
Nine Entertainment and Greenvale Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Entertainment and Greenvale Energy
The main advantage of trading using opposite Nine Entertainment and Greenvale Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Entertainment position performs unexpectedly, Greenvale Energy 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 Greenvale Energy will offset losses from the drop in Greenvale Energy's long position.| Nine Entertainment vs. Encounter Resources | Nine Entertainment vs. Tlou Energy | Nine Entertainment vs. Superior Resources | Nine Entertainment vs. Peel Mining |
| Greenvale Energy vs. Alto Metals | Greenvale Energy vs. Nine Entertainment Co | Greenvale Energy vs. Autosports Group | Greenvale Energy vs. Skycity Entertainment Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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