Correlation Between Nufarm Finance and Nine Entertainment
Can any of the company-specific risk be diversified away by investing in both Nufarm Finance and Nine 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 Nufarm Finance and Nine Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nufarm Finance NZ and Nine Entertainment Co, you can compare the effects of market volatilities on Nufarm Finance and Nine 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 Nufarm Finance with a short position of Nine Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nufarm Finance and Nine Entertainment.
Diversification Opportunities for Nufarm Finance and Nine Entertainment
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nufarm and Nine is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nufarm Finance NZ and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment and Nufarm Finance 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 Nufarm Finance NZ are associated (or correlated) with Nine Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Entertainment has no effect on the direction of Nufarm Finance i.e., Nufarm Finance and Nine Entertainment go up and down completely randomly.
Pair Corralation between Nufarm Finance and Nine Entertainment
Assuming the 90 days trading horizon Nufarm Finance NZ is expected to generate 0.45 times more return on investment than Nine Entertainment. However, Nufarm Finance NZ is 2.24 times less risky than Nine Entertainment. It trades about 0.05 of its potential returns per unit of risk. Nine Entertainment Co is currently generating about -0.03 per unit of risk. If you would invest 7,738 in Nufarm Finance NZ on September 14, 2024 and sell it today you would earn a total of 1,422 from holding Nufarm Finance NZ or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nufarm Finance NZ vs. Nine Entertainment Co
Performance |
| Timeline |
| Nufarm Finance NZ |
| Nine Entertainment |
Nufarm Finance and Nine Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nufarm Finance and Nine Entertainment
The main advantage of trading using opposite Nufarm Finance and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nufarm Finance position performs unexpectedly, Nine 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 Nine Entertainment will offset losses from the drop in Nine Entertainment's long position.| Nufarm Finance vs. Australian Unity Office | Nufarm Finance vs. Leeuwin Metals | Nufarm Finance vs. Catalyst Metals | Nufarm Finance vs. Group 6 Metals |
| Nine Entertainment vs. Regis Healthcare | Nine Entertainment vs. Insignia Financial | Nine Entertainment vs. Nufarm Finance NZ | Nine Entertainment vs. Healthco Healthcare and |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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