Correlation Between Qantas Airways and Nine Entertainment
Can any of the company-specific risk be diversified away by investing in both Qantas Airways 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 Qantas Airways and Nine Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qantas Airways and Nine Entertainment Co, you can compare the effects of market volatilities on Qantas Airways 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 Qantas Airways with a short position of Nine Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qantas Airways and Nine Entertainment.
Diversification Opportunities for Qantas Airways and Nine Entertainment
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qantas and Nine is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Qantas Airways and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment and Qantas Airways 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 Qantas Airways 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 Qantas Airways i.e., Qantas Airways and Nine Entertainment go up and down completely randomly.
Pair Corralation between Qantas Airways and Nine Entertainment
Assuming the 90 days trading horizon Qantas Airways is expected to generate 2.05 times less return on investment than Nine Entertainment. But when comparing it to its historical volatility, Qantas Airways is 1.11 times less risky than Nine Entertainment. It trades about 0.12 of its potential returns per unit of risk. Nine Entertainment Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Nine Entertainment Co on October 28, 2024 and sell it today you would earn a total of 10.00 from holding Nine Entertainment Co or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qantas Airways vs. Nine Entertainment Co
Performance |
| Timeline |
| Qantas Airways |
| Nine Entertainment |
Qantas Airways and Nine Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qantas Airways and Nine Entertainment
The main advantage of trading using opposite Qantas Airways and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qantas Airways 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.| Qantas Airways vs. Lendlease Group | Qantas Airways vs. Bank of Queensland | Qantas Airways vs. Wt Financial Group | Qantas Airways vs. Clime Investment Management |
| Nine Entertainment vs. Embark Education Group | Nine Entertainment vs. Ora Banda Mining | Nine Entertainment vs. Hutchison Telecommunications | Nine Entertainment vs. Saferoads Holdings |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |