Correlation Between Ainsworth Game and RLF AgTech

Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and RLF AgTech 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 RLF AgTech 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 RLF AgTech, you can compare the effects of market volatilities on Ainsworth Game and RLF AgTech 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 RLF AgTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and RLF AgTech.

Diversification Opportunities for Ainsworth Game and RLF AgTech

-0.2

Correlation Coefficient

Ainsworth Game  RLF AgTech

Good diversification

The 3 months correlation between Ainsworth and RLF is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and RLF AgTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLF AgTech 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 RLF AgTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RLF AgTech has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and RLF AgTech go up and down completely randomly.

Pair Corralation between Ainsworth Game and RLF AgTech

Assuming the 90 days trading horizon Ainsworth Game Technology is expected to generate 0.73 times more return on investment than RLF AgTech. However, Ainsworth Game Technology is 1.38 times less risky than RLF AgTech. It trades about -0.02 of its potential returns per unit of risk. RLF AgTech is currently generating about -0.06 per unit of risk. If you would invest  80.00  in Ainsworth Game Technology on September 2, 2024 and sell it today you would lose (5.00) from holding Ainsworth Game Technology or give up 6.25% of portfolio value over 90 days.

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

Ainsworth Game Technology  vs.  RLF AgTech

Ainsworth Game Technology

Risk-Adjusted Performance

0 of 100

Very Weak

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

RLF AgTech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RLF AgTech 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 technical and fundamental indicators 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.

Pair Trading with Ainsworth Game and RLF AgTech

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

The idea behind Ainsworth Game Technology and RLF AgTech 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.