Correlation Between Ainsworth Game and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Westpac Banking 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 Westpac Banking 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 Westpac Banking, you can compare the effects of market volatilities on Ainsworth Game and Westpac Banking 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 Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Westpac Banking.
Diversification Opportunities for Ainsworth Game and Westpac Banking
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ainsworth and Westpac is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking 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 Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Westpac Banking go up and down completely randomly.
Pair Corralation between Ainsworth Game and Westpac Banking
Assuming the 90 days trading horizon Ainsworth Game Technology is expected to generate 8.87 times more return on investment than Westpac Banking. However, Ainsworth Game is 8.87 times more volatile than Westpac Banking. It trades about 0.06 of its potential returns per unit of risk. Westpac Banking is currently generating about -0.04 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ainsworth Game Technology vs. Westpac Banking
Performance |
| Timeline |
| Ainsworth Game Technology |
| Westpac Banking |
Ainsworth Game and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and Westpac Banking
The main advantage of trading using opposite Ainsworth Game and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.| Ainsworth Game vs. G8 Education | Ainsworth Game vs. Richmond Vanadium Technology | Ainsworth Game vs. Charter Hall Education | Ainsworth Game vs. Queste Communications |
| Westpac Banking vs. Ras Technology Holdings | Westpac Banking vs. Beston Global Food | Westpac Banking vs. Retail Food Group | Westpac Banking vs. TTG Fintech |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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