Correlation Between Ainsworth Game and Premier Investments
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Premier Investments 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 Premier Investments 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 Premier Investments, you can compare the effects of market volatilities on Ainsworth Game and Premier Investments 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 Premier Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Premier Investments.
Diversification Opportunities for Ainsworth Game and Premier Investments
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ainsworth and Premier is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Premier Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Investments 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 Premier Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Investments has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Premier Investments go up and down completely randomly.
Pair Corralation between Ainsworth Game and Premier Investments
Assuming the 90 days trading horizon Ainsworth Game Technology is expected to generate 1.89 times more return on investment than Premier Investments. However, Ainsworth Game is 1.89 times more volatile than Premier Investments. It trades about 0.06 of its potential returns per unit of risk. Premier Investments is currently generating about 0.09 per unit of risk. If you would invest 73.00 in Ainsworth Game Technology on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Ainsworth Game Technology or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ainsworth Game Technology vs. Premier Investments
Performance |
| Timeline |
| Ainsworth Game Technology |
| Premier Investments |
Ainsworth Game and Premier Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and Premier Investments
The main advantage of trading using opposite Ainsworth Game and Premier Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Premier Investments 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 Premier Investments will offset losses from the drop in Premier Investments' long position.| Ainsworth Game vs. G8 Education | Ainsworth Game vs. Richmond Vanadium Technology | Ainsworth Game vs. Charter Hall Education | Ainsworth Game vs. Queste Communications |
| Premier Investments vs. Aneka Tambang Tbk | Premier Investments vs. BHP Group Limited | Premier Investments vs. Rio Tinto | Premier Investments vs. Macquarie Group Ltd |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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