Correlation Between Nine Entertainment and Sports Entertainment
Can any of the company-specific risk be diversified away by investing in both Nine Entertainment and Sports Entertainment 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 Sports Entertainment 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 Sports Entertainment Group, you can compare the effects of market volatilities on Nine Entertainment and Sports Entertainment 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 Sports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Entertainment and Sports Entertainment.
Diversification Opportunities for Nine Entertainment and Sports Entertainment
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nine and Sports is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nine Entertainment Co and Sports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Entertainment 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 Sports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Entertainment has no effect on the direction of Nine Entertainment i.e., Nine Entertainment and Sports Entertainment go up and down completely randomly.
Pair Corralation between Nine Entertainment and Sports Entertainment
Assuming the 90 days trading horizon Nine Entertainment Co is expected to generate 0.33 times more return on investment than Sports Entertainment. However, Nine Entertainment Co is 2.99 times less risky than Sports Entertainment. It trades about 0.04 of its potential returns per unit of risk. Sports Entertainment Group is currently generating about -0.06 per unit of risk. If you would invest 124.00 in Nine Entertainment Co on October 18, 2024 and sell it today you would earn a total of 6.00 from holding Nine Entertainment Co or generate 4.84% 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. Sports Entertainment Group
Performance |
| Timeline |
| Nine Entertainment |
| Sports Entertainment |
Nine Entertainment and Sports Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Entertainment and Sports Entertainment
The main advantage of trading using opposite Nine Entertainment and Sports Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Entertainment position performs unexpectedly, Sports Entertainment 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 Sports Entertainment will offset losses from the drop in Sports Entertainment's long position.| Nine Entertainment vs. Farm Pride Foods | Nine Entertainment vs. Oceania Healthcare | Nine Entertainment vs. Air New Zealand | Nine Entertainment vs. Austco Healthcare |
| Sports Entertainment vs. Nine Entertainment Co | Sports Entertainment vs. Auctus Alternative Investments | Sports Entertainment vs. Garda Diversified Ppty | Sports Entertainment vs. Platinum Asia Investments |
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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