Correlation Between Ainsworth Game and Champion Iron
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Champion Iron 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 Champion Iron 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 Champion Iron, you can compare the effects of market volatilities on Ainsworth Game and Champion Iron 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 Champion Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Champion Iron.
Diversification Opportunities for Ainsworth Game and Champion Iron
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ainsworth and Champion is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Champion Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Iron 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 Champion Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Iron has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Champion Iron go up and down completely randomly.
Pair Corralation between Ainsworth Game and Champion Iron
Assuming the 90 days trading horizon Ainsworth Game Technology is expected to under-perform the Champion Iron. In addition to that, Ainsworth Game is 1.3 times more volatile than Champion Iron. It trades about -0.01 of its total potential returns per unit of risk. Champion Iron is currently generating about 0.0 per unit of volatility. If you would invest 676.00 in Champion Iron on September 2, 2024 and sell it today you would lose (103.00) from holding Champion Iron or give up 15.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ainsworth Game Technology vs. Champion Iron
Performance |
| Timeline |
| Ainsworth Game Technology |
| Champion Iron |
Ainsworth Game and Champion Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and Champion Iron
The main advantage of trading using opposite Ainsworth Game and Champion Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Champion Iron 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 Champion Iron will offset losses from the drop in Champion Iron's long position.| Ainsworth Game vs. iShares Global Healthcare | Ainsworth Game vs. Australian Dairy Farms | Ainsworth Game vs. Adriatic Metals Plc | Ainsworth Game vs. Australian Agricultural |
| Champion Iron vs. Lendlease Group | Champion Iron vs. Fisher Paykel Healthcare | Champion Iron vs. Apiam Animal Health | Champion Iron vs. Singular Health Group |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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