Correlation Between Nine Entertainment and Macquarie Technology

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

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

Diversification Opportunities for Nine Entertainment and Macquarie Technology

-0.1

Correlation Coefficient

Nine Entertainment  Macquarie Technology

Good diversification

The 3 months correlation between Nine and Macquarie is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Nine Entertainment Co and Macquarie Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Technology and Nine 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 Nine Entertainment Co are associated (or correlated) with Macquarie Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Technology has no effect on the direction of Nine Entertainment i.e., Nine Entertainment and Macquarie Technology go up and down completely randomly.

Pair Corralation between Nine Entertainment and Macquarie Technology

Assuming the 90 days trading horizon Nine Entertainment is expected to generate 2.53 times less return on investment than Macquarie Technology. But when comparing it to its historical volatility, Nine Entertainment Co is 1.08 times less risky than Macquarie Technology. It trades about 0.03 of its potential returns per unit of risk. Macquarie Technology Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  8,403  in Macquarie Technology Group on October 6, 2024 and sell it today you would earn a total of  426.00  from holding Macquarie Technology Group or generate 5.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nine Entertainment Co  vs.  Macquarie Technology Group

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.

Macquarie Technology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Macquarie Technology Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Macquarie Technology 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 Nine Entertainment and Macquarie Technology

The main advantage of trading using opposite Nine Entertainment and Macquarie Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Entertainment position performs unexpectedly, Macquarie Technology 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 Macquarie Technology will offset losses from the drop in Macquarie Technology's long position.

The idea behind Nine Entertainment Co and Macquarie Technology Group 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..