Correlation Between Nine Entertainment and Lendlease
Can any of the company-specific risk be diversified away by investing in both Nine Entertainment and Lendlease 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 Lendlease 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 Lendlease Group, you can compare the effects of market volatilities on Nine Entertainment and Lendlease 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 Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Entertainment and Lendlease.
Diversification Opportunities for Nine Entertainment and Lendlease
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nine and Lendlease is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nine Entertainment Co and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group 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 Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of Nine Entertainment i.e., Nine Entertainment and Lendlease go up and down completely randomly.
Pair Corralation between Nine Entertainment and Lendlease
Assuming the 90 days trading horizon Nine Entertainment Co is expected to generate 1.69 times more return on investment than Lendlease. However, Nine Entertainment is 1.69 times more volatile than Lendlease Group. It trades about 0.17 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.06 per unit of risk. If you would invest 120.00 in Nine Entertainment Co on August 27, 2024 and sell it today you would earn a total of 8.00 from holding Nine Entertainment Co or generate 6.67% 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. Lendlease Group
Performance |
| Timeline |
| Nine Entertainment |
| Lendlease Group |
Nine Entertainment and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Entertainment and Lendlease
The main advantage of trading using opposite Nine Entertainment and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Entertainment position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease's long position.| Nine Entertainment vs. Gtn | Nine Entertainment vs. Dynamic Drill And | Nine Entertainment vs. Insignia Financial | Nine Entertainment vs. G8 Education |
| Lendlease vs. Charter Hall Retail | Lendlease vs. Infomedia | Lendlease vs. Skycity Entertainment Group | Lendlease 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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