Correlation Between Nine Entertainment and Macquarie Technology
Can any of the company-specific risk be diversified away by investing in both Nine Entertainment and Macquarie Technology 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 Macquarie Technology 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 Macquarie Technology Group, you can compare the effects of market volatilities on Nine Entertainment and Macquarie Technology 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 Macquarie Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Entertainment and Macquarie Technology.
Diversification Opportunities for Nine Entertainment and Macquarie Technology
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nine and Macquarie is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nine Entertainment Co and Macquarie Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Technology 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 Macquarie Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Technology has no effect on the direction of Nine Entertainment i.e., Nine Entertainment and Macquarie Technology go up and down completely randomly.
Pair Corralation between Nine Entertainment and Macquarie Technology
Assuming the 90 days trading horizon Nine Entertainment Co is expected to generate 1.73 times more return on investment than Macquarie Technology. However, Nine Entertainment is 1.73 times more volatile than Macquarie Technology Group. It trades about 0.19 of its potential returns per unit of risk. Macquarie Technology Group is currently generating about 0.15 per unit of risk. If you would invest 116.00 in Nine Entertainment Co on September 2, 2024 and sell it today you would earn a total of 9.00 from holding Nine Entertainment Co or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Entertainment Co vs. Macquarie Technology Group
Performance |
| Timeline |
| Nine Entertainment |
| Macquarie Technology |
Nine Entertainment and Macquarie Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Entertainment and Macquarie Technology
The main advantage of trading using opposite Nine Entertainment and Macquarie Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Entertainment position performs unexpectedly, Macquarie Technology 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 Macquarie Technology will offset losses from the drop in Macquarie Technology's long position.| Nine Entertainment vs. Aneka Tambang Tbk | Nine Entertainment vs. BHP Group Limited | Nine Entertainment vs. Commonwealth Bank of | Nine Entertainment vs. Commonwealth Bank of |
| Macquarie Technology vs. National Australia Bank | Macquarie Technology vs. Westpac Banking | Macquarie Technology vs. National Australia Bank | Macquarie Technology vs. Commonwealth Bank of |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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