Correlation Between Ainsworth Game and Rave Restaurant
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Rave Restaurant 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 Rave Restaurant 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 Rave Restaurant Group, you can compare the effects of market volatilities on Ainsworth Game and Rave Restaurant 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 Rave Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Rave Restaurant.
Diversification Opportunities for Ainsworth Game and Rave Restaurant
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ainsworth and Rave is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Rave Restaurant Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rave Restaurant Group 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 Rave Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rave Restaurant Group has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Rave Restaurant go up and down completely randomly.
Pair Corralation between Ainsworth Game and Rave Restaurant
Assuming the 90 days horizon Ainsworth Game Technology is expected to under-perform the Rave Restaurant. But the pink sheet apears to be less risky and, when comparing its historical volatility, Ainsworth Game Technology is 1.38 times less risky than Rave Restaurant. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Rave Restaurant Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 176.00 in Rave Restaurant Group on September 14, 2024 and sell it today you would earn a total of 126.00 from holding Rave Restaurant Group or generate 71.59% 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. Rave Restaurant Group
Performance |
Timeline |
Ainsworth Game Technology |
Rave Restaurant Group |
Ainsworth Game and Rave Restaurant Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ainsworth Game and Rave Restaurant
The main advantage of trading using opposite Ainsworth Game and Rave Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Rave Restaurant 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 Rave Restaurant will offset losses from the drop in Rave Restaurant's long position.Ainsworth Game vs. Intema Solutions | Ainsworth Game vs. 888 Holdings | Ainsworth Game vs. Royal Wins | Ainsworth Game vs. Real Luck Group |
Rave Restaurant vs. Ark Restaurants Corp | Rave Restaurant vs. One Group Hospitality | Rave Restaurant vs. Flanigans Enterprises | Rave Restaurant vs. Noble Romans |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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