Correlation Between Ainsworth Game and Tamawood
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Tamawood 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 Tamawood 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 Tamawood, you can compare the effects of market volatilities on Ainsworth Game and Tamawood 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 Tamawood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Tamawood.
Diversification Opportunities for Ainsworth Game and Tamawood
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ainsworth and Tamawood is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Tamawood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamawood 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 Tamawood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamawood has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Tamawood go up and down completely randomly.
Pair Corralation between Ainsworth Game and Tamawood
Assuming the 90 days trading horizon Ainsworth Game Technology is expected to generate 2.13 times more return on investment than Tamawood. However, Ainsworth Game is 2.13 times more volatile than Tamawood. It trades about 0.03 of its potential returns per unit of risk. Tamawood is currently generating about -0.11 per unit of risk. If you would invest 74.00 in Ainsworth Game Technology on October 11, 2024 and sell it today you would earn a total of 1.00 from holding Ainsworth Game Technology or generate 1.35% 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. Tamawood
Performance |
| Timeline |
| Ainsworth Game Technology |
| Tamawood |
Ainsworth Game and Tamawood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and Tamawood
The main advantage of trading using opposite Ainsworth Game and Tamawood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Tamawood 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 Tamawood will offset losses from the drop in Tamawood's long position.| Ainsworth Game vs. Sayona Mining | Ainsworth Game vs. Queste Communications | Ainsworth Game vs. MetalsGrove Mining | Ainsworth Game vs. Richmond Vanadium Technology |
| Tamawood vs. Sky Metals | Tamawood vs. 4Dmedical | Tamawood vs. Queste Communications | Tamawood vs. Medical Developments International |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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