Correlation Between Stockland and Nine Entertainment

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

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

Diversification Opportunities for Stockland and Nine Entertainment

0.59

Correlation Coefficient

Stockland  Nine Entertainment

Very weak diversification

The 3 months correlation between Stockland and Nine is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Stockland and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment and Stockland 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 Stockland 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 Stockland i.e., Stockland and Nine Entertainment go up and down completely randomly.

Pair Corralation between Stockland and Nine Entertainment

Assuming the 90 days trading horizon Stockland is expected to generate 4831.0 times less return on investment than Nine Entertainment. But when comparing it to its historical volatility, Stockland is 2.54 times less risky than Nine Entertainment. It trades about 0.0 of its potential returns per unit of risk. Nine Entertainment Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  125.00  in Nine Entertainment Co on December 4, 2024 and sell it today you would earn a total of  37.00  from holding Nine Entertainment Co or generate 29.6% return on investment over 90 days.

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

Stockland  vs.  Nine Entertainment Co

Stockland

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stockland has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Stockland 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

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nine Entertainment Co are ranked lower than 10 (%) 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 Stockland and Nine Entertainment

The main advantage of trading using opposite Stockland and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stockland 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 Stockland 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.