Correlation Between Ainsworth Game and Brickworks
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Brickworks 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 Brickworks 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 Brickworks, you can compare the effects of market volatilities on Ainsworth Game and Brickworks 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 Brickworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Brickworks.
Diversification Opportunities for Ainsworth Game and Brickworks
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ainsworth and Brickworks is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Brickworks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brickworks 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 Brickworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brickworks has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Brickworks go up and down completely randomly.
Pair Corralation between Ainsworth Game and Brickworks
Assuming the 90 days trading horizon Ainsworth Game Technology is expected to generate 2.37 times more return on investment than Brickworks. However, Ainsworth Game is 2.37 times more volatile than Brickworks. It trades about 0.14 of its potential returns per unit of risk. Brickworks is currently generating about -0.08 per unit of risk. If you would invest 70.00 in Ainsworth Game Technology on September 3, 2024 and sell it today you would earn a total of 5.00 from holding Ainsworth Game Technology or generate 7.14% 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. Brickworks
Performance |
| Timeline |
| Ainsworth Game Technology |
| Brickworks |
Ainsworth Game and Brickworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and Brickworks
The main advantage of trading using opposite Ainsworth Game and Brickworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Brickworks 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 Brickworks will offset losses from the drop in Brickworks' long position.| Ainsworth Game vs. Westpac Banking | Ainsworth Game vs. Champion Iron | Ainsworth Game vs. iShares Global Healthcare | Ainsworth Game vs. Peel Mining |
| Brickworks vs. Ainsworth Game Technology | Brickworks vs. Advanced Braking Technology | Brickworks vs. Queste Communications | Brickworks vs. Australian Unity Office |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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