Correlation Between Stelar Metals and Nine Entertainment

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

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

Diversification Opportunities for Stelar Metals and Nine Entertainment

0.09

Correlation Coefficient

Stelar Metals  Nine Entertainment

Significant diversification

The 3 months correlation between Stelar and Nine is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment and Stelar Metals 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 Stelar Metals 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 Stelar Metals i.e., Stelar Metals and Nine Entertainment go up and down completely randomly.

Pair Corralation between Stelar Metals and Nine Entertainment

Assuming the 90 days trading horizon Stelar Metals is expected to generate 3.16 times more return on investment than Nine Entertainment. However, Stelar Metals is 3.16 times more volatile than Nine Entertainment Co. It trades about 0.04 of its potential returns per unit of risk. Nine Entertainment Co is currently generating about -0.09 per unit of risk. If you would invest  6.60  in Stelar Metals on October 1, 2024 and sell it today you would earn a total of  0.10  from holding Stelar Metals or generate 1.52% return on investment over 90 days.

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

Stelar Metals  vs.  Nine Entertainment Co

Stelar Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stelar Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Nine Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nine Entertainment Co has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Stelar Metals and Nine Entertainment

The main advantage of trading using opposite Stelar Metals and Nine Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals 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 Stelar Metals 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .