Correlation Between Nine Entertainment and Fonu2

Can any of the company-specific risk be diversified away by investing in both Nine Entertainment and Fonu2 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 Fonu2 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 Fonu2 Inc, you can compare the effects of market volatilities on Nine Entertainment and Fonu2 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 Fonu2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Entertainment and Fonu2.

Diversification Opportunities for Nine Entertainment and Fonu2

0.42

Correlation Coefficient

Nine Entertainment  Fonu2

Very weak diversification

The 3 months correlation between Nine and Fonu2 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nine Entertainment Co and Fonu2 Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonu2 Inc 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 Fonu2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonu2 Inc has no effect on the direction of Nine Entertainment i.e., Nine Entertainment and Fonu2 go up and down completely randomly.

Pair Corralation between Nine Entertainment and Fonu2

Assuming the 90 days horizon Nine Entertainment is expected to generate 22.05 times less return on investment than Fonu2. But when comparing it to its historical volatility, Nine Entertainment Co is 13.81 times less risky than Fonu2. It trades about 0.08 of its potential returns per unit of risk. Fonu2 Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Fonu2 Inc on December 28, 2024 and sell it today you would earn a total of  0.01  from holding Fonu2 Inc or generate 9.223372036854776E16% return on investment over 90 days.

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

Nine Entertainment Co  vs.  Fonu2 Inc

Nine Entertainment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nine Entertainment Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Nine Entertainment reported solid returns over the last few months and may actually be approaching a breakup point.

Fonu2 Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fonu2 Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Fonu2 unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nine Entertainment and Fonu2

The main advantage of trading using opposite Nine Entertainment and Fonu2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Entertainment position performs unexpectedly, Fonu2 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 Fonu2 will offset losses from the drop in Fonu2's long position.

The idea behind Nine Entertainment Co and Fonu2 Inc 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 Commodity Directory module to find actively traded commodities issued by global exchanges.