Correlation Between Pengana Private and Nine Entertainment

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

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

Diversification Opportunities for Pengana Private and Nine Entertainment

-0.64

Correlation Coefficient

Pengana Private  Nine Entertainment

Excellent diversification

The 3 months correlation between Pengana and Nine is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pengana Private Equity and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment and Pengana Private 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 Pengana Private Equity 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 Pengana Private i.e., Pengana Private and Nine Entertainment go up and down completely randomly.

Pair Corralation between Pengana Private and Nine Entertainment

Assuming the 90 days trading horizon Pengana Private Equity is expected to under-perform the Nine Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Pengana Private Equity is 1.13 times less risky than Nine Entertainment. The stock trades about -0.02 of its potential returns per unit of risk. The Nine Entertainment Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  122.00  in Nine Entertainment Co on December 29, 2024 and sell it today you would earn a total of  33.00  from holding Nine Entertainment Co or generate 27.05% return on investment over 90 days.

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

Pengana Private Equity  vs.  Nine Entertainment Co

Pengana Private Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pengana Private Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pengana Private is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Pengana Private and Nine Entertainment

The main advantage of trading using opposite Pengana Private and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pengana Private 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 Pengana Private Equity 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..