Correlation Between Premier Investments and Nine Entertainment
Can any of the company-specific risk be diversified away by investing in both Premier Investments 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 Premier Investments and Nine Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Investments and Nine Entertainment Co, you can compare the effects of market volatilities on Premier Investments 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 Premier Investments with a short position of Nine Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Investments and Nine Entertainment.
Diversification Opportunities for Premier Investments and Nine Entertainment
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Premier and Nine is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Premier Investments and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment and Premier Investments 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 Premier Investments 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 Premier Investments i.e., Premier Investments and Nine Entertainment go up and down completely randomly.
Pair Corralation between Premier Investments and Nine Entertainment
Assuming the 90 days trading horizon Premier Investments is expected to under-perform the Nine Entertainment. In addition to that, Premier Investments is 1.66 times more volatile than Nine Entertainment Co. It trades about -0.08 of its total potential returns per unit of risk. Nine Entertainment Co is currently generating about 0.14 per unit of volatility. If you would invest 119.00 in Nine Entertainment Co on October 29, 2024 and sell it today you would earn a total of 16.00 from holding Nine Entertainment Co or generate 13.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Investments vs. Nine Entertainment Co
Performance |
| Timeline |
| Premier Investments |
| Nine Entertainment |
Premier Investments and Nine Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Investments and Nine Entertainment
The main advantage of trading using opposite Premier Investments and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Investments 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.| Premier Investments vs. ACDC Metals | Premier Investments vs. Centuria Industrial Reit | Premier Investments vs. Kneomedia | Premier Investments vs. Truscott Mining Corp |
| Nine Entertainment vs. Sequoia Financial Group | Nine Entertainment vs. Embark Education Group | Nine Entertainment vs. Credit Clear | Nine Entertainment vs. Charter Hall Retail |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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