Correlation Between Nine Entertainment and Nanosonics
Can any of the company-specific risk be diversified away by investing in both Nine Entertainment and Nanosonics 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 Nanosonics 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 Nanosonics, you can compare the effects of market volatilities on Nine Entertainment and Nanosonics 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 Nanosonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Entertainment and Nanosonics.
Diversification Opportunities for Nine Entertainment and Nanosonics
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nine and Nanosonics is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nine Entertainment Co and Nanosonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanosonics 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 Nanosonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanosonics has no effect on the direction of Nine Entertainment i.e., Nine Entertainment and Nanosonics go up and down completely randomly.
Pair Corralation between Nine Entertainment and Nanosonics
Assuming the 90 days trading horizon Nine Entertainment Co is expected to generate 0.78 times more return on investment than Nanosonics. However, Nine Entertainment Co is 1.28 times less risky than Nanosonics. It trades about 0.28 of its potential returns per unit of risk. Nanosonics is currently generating about -0.14 per unit of risk. If you would invest 113.00 in Nine Entertainment Co on September 12, 2024 and sell it today you would earn a total of 13.00 from holding Nine Entertainment Co or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Entertainment Co vs. Nanosonics
Performance |
| Timeline |
| Nine Entertainment |
| Nanosonics |
Nine Entertainment and Nanosonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Entertainment and Nanosonics
The main advantage of trading using opposite Nine Entertainment and Nanosonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Entertainment position performs unexpectedly, Nanosonics 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 Nanosonics will offset losses from the drop in Nanosonics' long position.| Nine Entertainment vs. REGAL ASIAN INVESTMENTS | Nine Entertainment vs. Step One Clothing | Nine Entertainment vs. Hotel Property Investments | Nine Entertainment vs. Australian United Investment |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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