Correlation Between Nine Entertainment and Zoom2u Technologies
Can any of the company-specific risk be diversified away by investing in both Nine Entertainment and Zoom2u Technologies 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 Zoom2u Technologies 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 Zoom2u Technologies, you can compare the effects of market volatilities on Nine Entertainment and Zoom2u Technologies 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 Zoom2u Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Entertainment and Zoom2u Technologies.
Diversification Opportunities for Nine Entertainment and Zoom2u Technologies
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nine and Zoom2u is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nine Entertainment Co and Zoom2u Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom2u Technologies 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 Zoom2u Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom2u Technologies has no effect on the direction of Nine Entertainment i.e., Nine Entertainment and Zoom2u Technologies go up and down completely randomly.
Pair Corralation between Nine Entertainment and Zoom2u Technologies
Assuming the 90 days trading horizon Nine Entertainment Co is expected to under-perform the Zoom2u Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Nine Entertainment Co is 1.88 times less risky than Zoom2u Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The Zoom2u Technologies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7.50 in Zoom2u Technologies on August 31, 2024 and sell it today you would lose (0.30) from holding Zoom2u Technologies or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Entertainment Co vs. Zoom2u Technologies
Performance |
| Timeline |
| Nine Entertainment |
| Zoom2u Technologies |
Nine Entertainment and Zoom2u Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Entertainment and Zoom2u Technologies
The main advantage of trading using opposite Nine Entertainment and Zoom2u Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Entertainment position performs unexpectedly, Zoom2u Technologies 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 Zoom2u Technologies will offset losses from the drop in Zoom2u Technologies' long position.| Nine Entertainment vs. Aneka Tambang Tbk | Nine Entertainment vs. Woolworths | Nine Entertainment vs. Commonwealth Bank | Nine Entertainment vs. BHP Group Limited |
| Zoom2u Technologies vs. Amani Gold | Zoom2u Technologies vs. A1 Investments Resources | Zoom2u Technologies vs. Coronado Global Resources | Zoom2u Technologies vs. Hutchison Telecommunications |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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