Correlation Between Ainsworth Game and Magellan Financial
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Magellan Financial 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 Magellan Financial 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 Magellan Financial Group, you can compare the effects of market volatilities on Ainsworth Game and Magellan Financial 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 Magellan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Magellan Financial.
Diversification Opportunities for Ainsworth Game and Magellan Financial
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ainsworth and Magellan is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Magellan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magellan Financial 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 Magellan Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magellan Financial has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Magellan Financial go up and down completely randomly.
Pair Corralation between Ainsworth Game and Magellan Financial
Assuming the 90 days trading horizon Ainsworth Game Technology is expected to under-perform the Magellan Financial. In addition to that, Ainsworth Game is 1.18 times more volatile than Magellan Financial Group. It trades about -0.07 of its total potential returns per unit of risk. Magellan Financial Group is currently generating about 0.1 per unit of volatility. If you would invest 1,002 in Magellan Financial Group on August 30, 2024 and sell it today you would earn a total of 86.00 from holding Magellan Financial Group or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ainsworth Game Technology vs. Magellan Financial Group
Performance |
| Timeline |
| Ainsworth Game Technology |
| Magellan Financial |
Ainsworth Game and Magellan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and Magellan Financial
The main advantage of trading using opposite Ainsworth Game and Magellan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Magellan Financial 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 Magellan Financial will offset losses from the drop in Magellan Financial's long position.| Ainsworth Game vs. Australian Unity Office | Ainsworth Game vs. Actinogen Medical | Ainsworth Game vs. Centaurus Metals | Ainsworth Game vs. Homeco Daily Needs |
| Magellan Financial vs. Champion Iron | Magellan Financial vs. Ridley | Magellan Financial vs. Peel Mining | Magellan Financial vs. Australian Dairy Farms |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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