Correlation Between Ainsworth Game and EMvision Medical
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and EMvision Medical 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 EMvision Medical 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 EMvision Medical Devices, you can compare the effects of market volatilities on Ainsworth Game and EMvision Medical 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 EMvision Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and EMvision Medical.
Diversification Opportunities for Ainsworth Game and EMvision Medical
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ainsworth and EMvision is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and EMvision Medical Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMvision Medical Devices 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 EMvision Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMvision Medical Devices has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and EMvision Medical go up and down completely randomly.
Pair Corralation between Ainsworth Game and EMvision Medical
Assuming the 90 days trading horizon Ainsworth Game is expected to generate 4.52 times less return on investment than EMvision Medical. But when comparing it to its historical volatility, Ainsworth Game Technology is 1.09 times less risky than EMvision Medical. It trades about 0.01 of its potential returns per unit of risk. EMvision Medical Devices is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 131.00 in EMvision Medical Devices on November 30, 2024 and sell it today you would earn a total of 54.00 from holding EMvision Medical Devices or generate 41.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ainsworth Game Technology vs. EMvision Medical Devices
Performance |
Timeline |
Ainsworth Game Technology |
EMvision Medical Devices |
Ainsworth Game and EMvision Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ainsworth Game and EMvision Medical
The main advantage of trading using opposite Ainsworth Game and EMvision Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, EMvision Medical 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 EMvision Medical will offset losses from the drop in EMvision Medical's long position.Ainsworth Game vs. IRIS Metals | ||
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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