Correlation Between Ainsworth Game and Old Republic

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

Diversification Opportunities for Ainsworth Game and Old Republic

-0.61

Correlation Coefficient

Ainsworth Game  Old Republic

Excellent diversification

The 3 months correlation between Ainsworth and Old is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Old Republic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Republic Interna 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 Old Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Republic Interna has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Old Republic go up and down completely randomly.

Pair Corralation between Ainsworth Game and Old Republic

Assuming the 90 days horizon Ainsworth Game Technology is expected to generate 2.56 times more return on investment than Old Republic. However, Ainsworth Game is 2.56 times more volatile than Old Republic International. It trades about 0.03 of its potential returns per unit of risk. Old Republic International is currently generating about 0.05 per unit of risk. If you would invest  54.00  in Ainsworth Game Technology on September 27, 2024 and sell it today you would earn a total of  1.00  from holding Ainsworth Game Technology or generate 1.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Ainsworth Game Technology  vs.  Old Republic International

Ainsworth Game Technology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ainsworth Game Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Ainsworth Game is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Old Republic Interna

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Old Republic International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Old Republic is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Ainsworth Game and Old Republic

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

The idea behind Ainsworth Game Technology and Old Republic International 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.