Correlation Between Ainsworth Game and Rea
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Rea 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 Rea 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 Rea Group, you can compare the effects of market volatilities on Ainsworth Game and Rea 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 Rea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Rea.
Diversification Opportunities for Ainsworth Game and Rea
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ainsworth and Rea is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Rea Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rea Group 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 Rea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rea Group has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Rea go up and down completely randomly.
Pair Corralation between Ainsworth Game and Rea
Assuming the 90 days trading horizon Ainsworth Game is expected to generate 9.57 times less return on investment than Rea. In addition to that, Ainsworth Game is 2.08 times more volatile than Rea Group. It trades about 0.01 of its total potential returns per unit of risk. Rea Group is currently generating about 0.26 per unit of volatility. If you would invest 23,199 in Rea Group on August 29, 2024 and sell it today you would earn a total of 1,904 from holding Rea Group or generate 8.21% 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. Rea Group
Performance |
| Timeline |
| Ainsworth Game Technology |
| Rea Group |
Ainsworth Game and Rea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and Rea
The main advantage of trading using opposite Ainsworth Game and Rea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Rea 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 Rea will offset losses from the drop in Rea'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 |
| Rea vs. Regal Investment | Rea vs. Australian United Investment | Rea vs. EMvision Medical Devices | Rea vs. A1 Investments Resources |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |