Correlation Between Advanced Braking and Ainsworth Game
Can any of the company-specific risk be diversified away by investing in both Advanced Braking and Ainsworth Game 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 Advanced Braking and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Braking Technology and Ainsworth Game Technology, you can compare the effects of market volatilities on Advanced Braking and Ainsworth Game 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 Advanced Braking with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Braking and Ainsworth Game.
Diversification Opportunities for Advanced Braking and Ainsworth Game
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advanced and Ainsworth is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Braking Technology and Ainsworth Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainsworth Game Technology and Advanced Braking 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 Advanced Braking Technology are associated (or correlated) with Ainsworth Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainsworth Game Technology has no effect on the direction of Advanced Braking i.e., Advanced Braking and Ainsworth Game go up and down completely randomly.
Pair Corralation between Advanced Braking and Ainsworth Game
Assuming the 90 days trading horizon Advanced Braking Technology is expected to generate 0.85 times more return on investment than Ainsworth Game. However, Advanced Braking Technology is 1.18 times less risky than Ainsworth Game. It trades about 0.28 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about -0.08 per unit of risk. If you would invest 7.70 in Advanced Braking Technology on August 27, 2024 and sell it today you would earn a total of 1.10 from holding Advanced Braking Technology or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Braking Technology vs. Ainsworth Game Technology
Performance |
| Timeline |
| Advanced Braking Tec |
| Ainsworth Game Technology |
Advanced Braking and Ainsworth Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Braking and Ainsworth Game
The main advantage of trading using opposite Advanced Braking and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Braking position performs unexpectedly, Ainsworth Game 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 Ainsworth Game will offset losses from the drop in Ainsworth Game's long position.| Advanced Braking vs. Home Consortium | Advanced Braking vs. Air New Zealand | Advanced Braking vs. Duxton Broadacre Farms | Advanced Braking vs. Finexia Financial Group |
| Ainsworth Game vs. Nova Eye Medical | Ainsworth Game vs. Sky Metals | Ainsworth Game vs. Catalyst Metals | Ainsworth Game vs. Toys R Us |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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