Correlation Between Ainsworth Game and ARN Media
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and ARN Media 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 ARN Media 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 ARN Media Limited, you can compare the effects of market volatilities on Ainsworth Game and ARN Media 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 ARN Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and ARN Media.
Diversification Opportunities for Ainsworth Game and ARN Media
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ainsworth and ARN is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and ARN Media Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARN Media Limited 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 ARN Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARN Media Limited has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and ARN Media go up and down completely randomly.
Pair Corralation between Ainsworth Game and ARN Media
Assuming the 90 days trading horizon Ainsworth Game Technology is expected to generate 1.17 times more return on investment than ARN Media. However, Ainsworth Game is 1.17 times more volatile than ARN Media Limited. It trades about 0.0 of its potential returns per unit of risk. ARN Media Limited is currently generating about -0.02 per unit of risk. If you would invest 99.00 in Ainsworth Game Technology on November 8, 2024 and sell it today you would lose (25.00) from holding Ainsworth Game Technology or give up 25.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ainsworth Game Technology vs. ARN Media Limited
Performance |
| Timeline |
| Ainsworth Game Technology |
| ARN Media Limited |
Ainsworth Game and ARN Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and ARN Media
The main advantage of trading using opposite Ainsworth Game and ARN Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, ARN Media 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 ARN Media will offset losses from the drop in ARN Media's long position.| Ainsworth Game vs. ChemX Materials | Ainsworth Game vs. Djerriwarrh Investments | Ainsworth Game vs. Beam Communications Holdings | Ainsworth Game vs. Navigator Global Investments |
| ARN Media vs. Andean Silver Limited | ARN Media vs. Peel Mining | ARN Media vs. Australian Unity Office | ARN Media vs. Charter Hall Retail |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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