Correlation Between Ainsworth Game and K2 Asset
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and K2 Asset 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 K2 Asset 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 K2 Asset Management, you can compare the effects of market volatilities on Ainsworth Game and K2 Asset 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 K2 Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and K2 Asset.
Diversification Opportunities for Ainsworth Game and K2 Asset
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ainsworth and KAM is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and K2 Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K2 Asset Management 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 K2 Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K2 Asset Management has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and K2 Asset go up and down completely randomly.
Pair Corralation between Ainsworth Game and K2 Asset
Assuming the 90 days trading horizon Ainsworth Game Technology is expected to under-perform the K2 Asset. But the stock apears to be less risky and, when comparing its historical volatility, Ainsworth Game Technology is 1.58 times less risky than K2 Asset. The stock trades about -0.01 of its potential returns per unit of risk. The K2 Asset Management is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.45 in K2 Asset Management on September 3, 2024 and sell it today you would earn a total of 3.55 from holding K2 Asset Management or generate 102.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ainsworth Game Technology vs. K2 Asset Management
Performance |
| Timeline |
| Ainsworth Game Technology |
| K2 Asset Management |
Ainsworth Game and K2 Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and K2 Asset
The main advantage of trading using opposite Ainsworth Game and K2 Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, K2 Asset 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 K2 Asset will offset losses from the drop in K2 Asset's long position.| Ainsworth Game vs. Westpac Banking | Ainsworth Game vs. Champion Iron | Ainsworth Game vs. iShares Global Healthcare | Ainsworth Game vs. Peel Mining |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |