Correlation Between Nine Entertainment and Skycity Entertainment
Can any of the company-specific risk be diversified away by investing in both Nine Entertainment and Skycity 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 Skycity 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 Skycity Entertainment Group, you can compare the effects of market volatilities on Nine Entertainment and Skycity 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 Skycity Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Entertainment and Skycity Entertainment.
Diversification Opportunities for Nine Entertainment and Skycity Entertainment
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nine and Skycity is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nine Entertainment Co and Skycity Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skycity 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 Skycity Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skycity Entertainment has no effect on the direction of Nine Entertainment i.e., Nine Entertainment and Skycity Entertainment go up and down completely randomly.
Pair Corralation between Nine Entertainment and Skycity Entertainment
Assuming the 90 days trading horizon Nine Entertainment Co is expected to generate 0.76 times more return on investment than Skycity Entertainment. However, Nine Entertainment Co is 1.31 times less risky than Skycity Entertainment. It trades about -0.02 of its potential returns per unit of risk. Skycity Entertainment Group is currently generating about -0.09 per unit of risk. If you would invest 131.00 in Nine Entertainment Co on November 9, 2024 and sell it today you would lose (1.00) from holding Nine Entertainment Co or give up 0.76% 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. Skycity Entertainment Group
Performance |
| Timeline |
| Nine Entertainment |
| Skycity Entertainment |
Nine Entertainment and Skycity Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Entertainment and Skycity Entertainment
The main advantage of trading using opposite Nine Entertainment and Skycity Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Entertainment position performs unexpectedly, Skycity 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 Skycity Entertainment will offset losses from the drop in Skycity Entertainment's long position.| Nine Entertainment vs. Westpac Banking | Nine Entertainment vs. National Australia Bank | Nine Entertainment vs. National Australia Bank | Nine Entertainment vs. Commonwealth Bank |
| Skycity Entertainment vs. Event Hospitality and | Skycity Entertainment vs. Epsilon Healthcare | Skycity Entertainment vs. Computershare | Skycity Entertainment vs. Sonic Healthcare |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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