Correlation Between Ainsworth Game and Energy Resources
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Energy Resources 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 Ainsworth Game and Energy Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ainsworth Game Technology and Energy Resources, you can compare the effects of market volatilities on Ainsworth Game and Energy Resources 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 Ainsworth Game with a short position of Energy Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Energy Resources.
Diversification Opportunities for Ainsworth Game and Energy Resources
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ainsworth and Energy is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Energy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Resources and Ainsworth Game 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 Ainsworth Game Technology are associated (or correlated) with Energy Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Resources has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Energy Resources go up and down completely randomly.
Pair Corralation between Ainsworth Game and Energy Resources
Assuming the 90 days trading horizon Ainsworth Game is expected to generate 21.4 times less return on investment than Energy Resources. But when comparing it to its historical volatility, Ainsworth Game Technology is 11.15 times less risky than Energy Resources. It trades about 0.05 of its potential returns per unit of risk. Energy Resources is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.60 in Energy Resources on September 14, 2024 and sell it today you would lose (0.40) from holding Energy Resources or give up 66.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ainsworth Game Technology vs. Energy Resources
Performance |
Timeline |
Ainsworth Game Technology |
Energy Resources |
Ainsworth Game and Energy Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ainsworth Game and Energy Resources
The main advantage of trading using opposite Ainsworth Game and Energy Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Energy Resources 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 Energy Resources will offset losses from the drop in Energy Resources' long position.Ainsworth Game vs. The Environmental Group | Ainsworth Game vs. Infomedia | Ainsworth Game vs. Super Retail Group | Ainsworth Game vs. COAST ENTERTAINMENT HOLDINGS |
Energy Resources vs. Ainsworth Game Technology | Energy Resources vs. Neurotech International | Energy Resources vs. Alto Metals | Energy Resources vs. Macquarie Technology Group |
Check out your portfolio center.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.
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