Correlation Between Ainsworth Game and Aussie Broadband
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Aussie Broadband 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 Aussie Broadband 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 Aussie Broadband, you can compare the effects of market volatilities on Ainsworth Game and Aussie Broadband 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 Aussie Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Aussie Broadband.
Diversification Opportunities for Ainsworth Game and Aussie Broadband
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ainsworth and Aussie is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Aussie Broadband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aussie Broadband 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 Aussie Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aussie Broadband has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Aussie Broadband go up and down completely randomly.
Pair Corralation between Ainsworth Game and Aussie Broadband
Assuming the 90 days trading horizon Ainsworth Game Technology is expected to under-perform the Aussie Broadband. In addition to that, Ainsworth Game is 1.27 times more volatile than Aussie Broadband. It trades about 0.0 of its total potential returns per unit of risk. Aussie Broadband is currently generating about 0.03 per unit of volatility. If you would invest 293.00 in Aussie Broadband on November 2, 2024 and sell it today you would earn a total of 94.00 from holding Aussie Broadband or generate 32.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ainsworth Game Technology vs. Aussie Broadband
Performance |
| Timeline |
| Ainsworth Game Technology |
| Aussie Broadband |
Ainsworth Game and Aussie Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and Aussie Broadband
The main advantage of trading using opposite Ainsworth Game and Aussie Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Aussie Broadband 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 Aussie Broadband will offset losses from the drop in Aussie Broadband's long position.| Ainsworth Game vs. Super Retail Group | Ainsworth Game vs. Dalaroo Metals | Ainsworth Game vs. Dug Technology | Ainsworth Game vs. Computershare |
| Aussie Broadband vs. Aneka Tambang Tbk | Aussie Broadband vs. Commonwealth Bank of | Aussie Broadband vs. Australia and New | Aussie Broadband vs. ANZ Group Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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