Correlation Between Ainsworth Game and WiseTech Global
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and WiseTech Global 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 WiseTech Global 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 WiseTech Global Limited, you can compare the effects of market volatilities on Ainsworth Game and WiseTech Global 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 WiseTech Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and WiseTech Global.
Diversification Opportunities for Ainsworth Game and WiseTech Global
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ainsworth and WiseTech is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and WiseTech Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiseTech Global 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 WiseTech Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiseTech Global has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and WiseTech Global go up and down completely randomly.
Pair Corralation between Ainsworth Game and WiseTech Global
Assuming the 90 days trading horizon Ainsworth Game Technology is expected to under-perform the WiseTech Global. In addition to that, Ainsworth Game is 1.97 times more volatile than WiseTech Global Limited. It trades about -0.11 of its total potential returns per unit of risk. WiseTech Global Limited is currently generating about -0.16 per unit of volatility. If you would invest 12,319 in WiseTech Global Limited on October 22, 2024 and sell it today you would lose (612.00) from holding WiseTech Global Limited or give up 4.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ainsworth Game Technology vs. WiseTech Global Limited
Performance |
| Timeline |
| Ainsworth Game Technology |
| WiseTech Global |
Ainsworth Game and WiseTech Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and WiseTech Global
The main advantage of trading using opposite Ainsworth Game and WiseTech Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, WiseTech Global 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 WiseTech Global will offset losses from the drop in WiseTech Global's long position.| Ainsworth Game vs. Pure Foods Tasmania | Ainsworth Game vs. Australian Unity Office | Ainsworth Game vs. Queste Communications | Ainsworth Game vs. Spirit Telecom |
| WiseTech Global vs. Sports Entertainment Group | WiseTech Global vs. Autosports Group | WiseTech Global vs. Ironbark Capital | WiseTech Global vs. Viva Leisure |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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