Correlation Between Ainsworth Game and Nova Eye
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Nova Eye 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 Nova Eye 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 Nova Eye Medical, you can compare the effects of market volatilities on Ainsworth Game and Nova Eye 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 Nova Eye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Nova Eye.
Diversification Opportunities for Ainsworth Game and Nova Eye
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ainsworth and Nova is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Nova Eye Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Eye Medical 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 Nova Eye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Eye Medical has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Nova Eye go up and down completely randomly.
Pair Corralation between Ainsworth Game and Nova Eye
Assuming the 90 days trading horizon Ainsworth Game Technology is expected to generate 0.93 times more return on investment than Nova Eye. However, Ainsworth Game Technology is 1.07 times less risky than Nova Eye. It trades about 0.15 of its potential returns per unit of risk. Nova Eye Medical is currently generating about -0.28 per unit of risk. If you would invest 71.00 in Ainsworth Game Technology on November 28, 2024 and sell it today you would earn a total of 10.00 from holding Ainsworth Game Technology or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ainsworth Game Technology vs. Nova Eye Medical
Performance |
| Timeline |
| Ainsworth Game Technology |
| Nova Eye Medical |
Ainsworth Game and Nova Eye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and Nova Eye
The main advantage of trading using opposite Ainsworth Game and Nova Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Nova Eye 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 Nova Eye will offset losses from the drop in Nova Eye's long position.| Ainsworth Game vs. Qbe Insurance Group | Ainsworth Game vs. Queste Communications | Ainsworth Game vs. Australian Unity Office | Ainsworth Game vs. Ras Technology Holdings |
| Nova Eye vs. Phoslock Environmental Technologies | Nova Eye vs. Hotel Property Investments | Nova Eye vs. Tombador Iron | Nova Eye vs. Red Hill Iron |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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