Correlation Between Ainsworth Game and Hammer Metals
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Hammer Metals 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 Hammer Metals 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 Hammer Metals, you can compare the effects of market volatilities on Ainsworth Game and Hammer Metals 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 Hammer Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Hammer Metals.
Diversification Opportunities for Ainsworth Game and Hammer Metals
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ainsworth and Hammer is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Hammer Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammer Metals 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 Hammer Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammer Metals has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Hammer Metals go up and down completely randomly.
Pair Corralation between Ainsworth Game and Hammer Metals
Assuming the 90 days trading horizon Ainsworth Game Technology is expected to under-perform the Hammer Metals. But the stock apears to be less risky and, when comparing its historical volatility, Ainsworth Game Technology is 1.53 times less risky than Hammer Metals. The stock trades about -0.16 of its potential returns per unit of risk. The Hammer Metals is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3.10 in Hammer Metals on October 20, 2024 and sell it today you would earn a total of 0.20 from holding Hammer Metals or generate 6.45% 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. Hammer Metals
Performance |
| Timeline |
| Ainsworth Game Technology |
| Hammer Metals |
Ainsworth Game and Hammer Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and Hammer Metals
The main advantage of trading using opposite Ainsworth Game and Hammer Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Hammer Metals 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 Hammer Metals will offset losses from the drop in Hammer Metals' long position.| Ainsworth Game vs. Microequities Asset Management | Ainsworth Game vs. Pinnacle Investment Management | Ainsworth Game vs. Andean Silver Limited | Ainsworth Game vs. Hudson Investment Group |
| Hammer Metals vs. Ainsworth Game Technology | Hammer Metals vs. Autosports Group | Hammer Metals vs. Computershare | Hammer Metals vs. oOhMedia |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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