Correlation Between SINCLAIRS HOTELS and Entertainment Network

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

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

Diversification Opportunities for SINCLAIRS HOTELS and Entertainment Network

0.64

Correlation Coefficient

SINCLAIRS HOTELS  Entertainment Network

Poor diversification

The 3 months correlation between SINCLAIRS and Entertainment is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SINCLAIRS HOTELS ORD and Entertainment Network Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entertainment Network and SINCLAIRS HOTELS 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 SINCLAIRS HOTELS ORD are associated (or correlated) with Entertainment Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entertainment Network has no effect on the direction of SINCLAIRS HOTELS i.e., SINCLAIRS HOTELS and Entertainment Network go up and down completely randomly.

Pair Corralation between SINCLAIRS HOTELS and Entertainment Network

Assuming the 90 days trading horizon SINCLAIRS HOTELS ORD is expected to under-perform the Entertainment Network. In addition to that, SINCLAIRS HOTELS is 1.38 times more volatile than Entertainment Network Limited. It trades about -0.04 of its total potential returns per unit of risk. Entertainment Network Limited is currently generating about 0.02 per unit of volatility. If you would invest  14,824  in Entertainment Network Limited on April 17, 2025 and sell it today you would earn a total of  144.00  from holding Entertainment Network Limited or generate 0.97% return on investment over 90 days.

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

SINCLAIRS HOTELS ORD  vs.  Entertainment Network Limited

SINCLAIRS HOTELS ORD

Risk-Adjusted Performance

Very Weak

Over the last 90 days SINCLAIRS HOTELS ORD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, SINCLAIRS HOTELS is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Entertainment Network

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Entertainment Network Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Entertainment Network is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SINCLAIRS HOTELS and Entertainment Network

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

The idea behind SINCLAIRS HOTELS ORD and Entertainment Network Limited 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.