Correlation Between Ainsworth Game and Metro Mining
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Metro Mining 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 Metro Mining 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 Metro Mining, you can compare the effects of market volatilities on Ainsworth Game and Metro Mining 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 Metro Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Metro Mining.
Diversification Opportunities for Ainsworth Game and Metro Mining
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ainsworth and Metro is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Metro Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Mining 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 Metro Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Mining has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Metro Mining go up and down completely randomly.
Pair Corralation between Ainsworth Game and Metro Mining
Assuming the 90 days trading horizon Ainsworth Game is expected to generate 5.44 times less return on investment than Metro Mining. But when comparing it to its historical volatility, Ainsworth Game Technology is 1.03 times less risky than Metro Mining. It trades about 0.01 of its potential returns per unit of risk. Metro Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5.30 in Metro Mining on August 28, 2024 and sell it today you would earn a total of 0.20 from holding Metro Mining or generate 3.77% 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. Metro Mining
Performance |
| Timeline |
| Ainsworth Game Technology |
| Metro Mining |
Ainsworth Game and Metro Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and Metro Mining
The main advantage of trading using opposite Ainsworth Game and Metro Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Metro Mining 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 Metro Mining will offset losses from the drop in Metro Mining's long position.| Ainsworth Game vs. Summit Resources Limited | Ainsworth Game vs. Ecofibre | Ainsworth Game vs. iShares Global Healthcare | Ainsworth Game vs. Adriatic Metals Plc |
| Metro Mining vs. Northern Star Resources | Metro Mining vs. Evolution Mining | Metro Mining vs. Bluescope Steel | Metro Mining vs. Sandfire Resources NL |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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