Correlation Between Sports Entertainment and National Australia
Can any of the company-specific risk be diversified away by investing in both Sports Entertainment and National Australia 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 Sports Entertainment and National Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sports Entertainment Group and National Australia Bank, you can compare the effects of market volatilities on Sports Entertainment and National Australia 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 Sports Entertainment with a short position of National Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sports Entertainment and National Australia.
Diversification Opportunities for Sports Entertainment and National Australia
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sports and National is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sports Entertainment Group and National Australia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Australia Bank and Sports 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 Sports Entertainment Group are associated (or correlated) with National Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Australia Bank has no effect on the direction of Sports Entertainment i.e., Sports Entertainment and National Australia go up and down completely randomly.
Pair Corralation between Sports Entertainment and National Australia
Assuming the 90 days trading horizon Sports Entertainment is expected to generate 1.05 times less return on investment than National Australia. In addition to that, Sports Entertainment is 3.5 times more volatile than National Australia Bank. It trades about 0.08 of its total potential returns per unit of risk. National Australia Bank is currently generating about 0.28 per unit of volatility. If you would invest 3,755 in National Australia Bank on November 4, 2024 and sell it today you would earn a total of 259.00 from holding National Australia Bank or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sports Entertainment Group vs. National Australia Bank
Performance |
| Timeline |
| Sports Entertainment |
| National Australia Bank |
Sports Entertainment and National Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sports Entertainment and National Australia
The main advantage of trading using opposite Sports Entertainment and National Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sports Entertainment position performs unexpectedly, National Australia 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 National Australia will offset losses from the drop in National Australia's long position.| Sports Entertainment vs. Autosports Group | Sports Entertainment vs. EMvision Medical Devices | Sports Entertainment vs. Fisher Paykel Healthcare | Sports Entertainment vs. Vitura Health Limited |
| National Australia vs. DY6 Metals | National Australia vs. Stelar Metals | National Australia vs. Centrex Metals | National Australia vs. Home Consortium |
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 CEOs Directory module to screen CEOs from public companies around the world.
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