Correlation Between Ainsworth Game and Hutchison Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Hutchison Telecommunicatio 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 Hutchison Telecommunicatio 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 Hutchison Telecommunications, you can compare the effects of market volatilities on Ainsworth Game and Hutchison Telecommunicatio 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 Hutchison Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Hutchison Telecommunicatio.
Diversification Opportunities for Ainsworth Game and Hutchison Telecommunicatio
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ainsworth and Hutchison is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Hutchison Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hutchison Telecommunicatio 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 Hutchison Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hutchison Telecommunicatio has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Hutchison Telecommunicatio go up and down completely randomly.
Pair Corralation between Ainsworth Game and Hutchison Telecommunicatio
Assuming the 90 days trading horizon Ainsworth Game Technology is expected to generate 0.66 times more return on investment than Hutchison Telecommunicatio. However, Ainsworth Game Technology is 1.51 times less risky than Hutchison Telecommunicatio. It trades about 0.11 of its potential returns per unit of risk. Hutchison Telecommunications is currently generating about -0.15 per unit of risk. If you would invest 71.00 in Ainsworth Game Technology on September 2, 2024 and sell it today you would earn a total of 4.00 from holding Ainsworth Game Technology or generate 5.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ainsworth Game Technology vs. Hutchison Telecommunications
Performance |
| Timeline |
| Ainsworth Game Technology |
| Hutchison Telecommunicatio |
Ainsworth Game and Hutchison Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and Hutchison Telecommunicatio
The main advantage of trading using opposite Ainsworth Game and Hutchison Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Hutchison Telecommunicatio 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 Hutchison Telecommunicatio will offset losses from the drop in Hutchison Telecommunicatio'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 |
| Hutchison Telecommunicatio vs. Skycity Entertainment Group | Hutchison Telecommunicatio vs. Collins Foods | Hutchison Telecommunicatio vs. Gold Road Resources | Hutchison Telecommunicatio vs. Iron Road |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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