Correlation Between Core Lithium and Nine Entertainment

Can any of the company-specific risk be diversified away by investing in both Core Lithium 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 Core Lithium and Nine Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Core Lithium and Nine Entertainment Co, you can compare the effects of market volatilities on Core Lithium 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 Core Lithium with a short position of Nine Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Lithium and Nine Entertainment.

Diversification Opportunities for Core Lithium and Nine Entertainment

-0.31

Correlation Coefficient

Core Lithium  Nine Entertainment

Very good diversification

The 3 months correlation between Core and Nine is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Core Lithium and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment and Core Lithium 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 Core Lithium 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 Core Lithium i.e., Core Lithium and Nine Entertainment go up and down completely randomly.

Pair Corralation between Core Lithium and Nine Entertainment

Assuming the 90 days trading horizon Core Lithium is expected to under-perform the Nine Entertainment. In addition to that, Core Lithium is 3.12 times more volatile than Nine Entertainment Co. It trades about -0.05 of its total potential returns per unit of risk. Nine Entertainment Co is currently generating about -0.09 per unit of volatility. If you would invest  191.00  in Nine Entertainment Co on September 18, 2024 and sell it today you would lose (66.00) from holding Nine Entertainment Co or give up 34.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Core Lithium  vs.  Nine Entertainment Co

Core Lithium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Core Lithium has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Nine Entertainment

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nine Entertainment Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Nine Entertainment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Core Lithium and Nine Entertainment

The main advantage of trading using opposite Core Lithium and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Lithium 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.

The idea behind Core Lithium and Nine Entertainment Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.