Correlation Between Nine Entertainment and OOhMedia

Can any of the company-specific risk be diversified away by investing in both Nine Entertainment and OOhMedia 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 OOhMedia 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 oOhMedia, you can compare the effects of market volatilities on Nine Entertainment and OOhMedia 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 OOhMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Entertainment and OOhMedia.

Diversification Opportunities for Nine Entertainment and OOhMedia

0.91

Correlation Coefficient

Nine Entertainment  OOhMedia

Almost no diversification

The 3 months correlation between Nine and OOhMedia is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Nine Entertainment Co and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia 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 OOhMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of oOhMedia has no effect on the direction of Nine Entertainment i.e., Nine Entertainment and OOhMedia go up and down completely randomly.

Pair Corralation between Nine Entertainment and OOhMedia

Assuming the 90 days trading horizon Nine Entertainment is expected to generate 1.15 times less return on investment than OOhMedia. In addition to that, Nine Entertainment is 1.15 times more volatile than oOhMedia. It trades about 0.12 of its total potential returns per unit of risk. oOhMedia is currently generating about 0.16 per unit of volatility. If you would invest  114.00  in oOhMedia on December 30, 2024 and sell it today you would earn a total of  38.00  from holding oOhMedia or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Nine Entertainment Co  vs.  oOhMedia

Nine Entertainment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nine Entertainment Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Nine Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

oOhMedia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in oOhMedia are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, OOhMedia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nine Entertainment and OOhMedia

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

The idea behind Nine Entertainment Co and oOhMedia 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.