Correlation Between Ainsworth Game and Nextplat Corp
Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Nextplat Corp 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 Nextplat Corp 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 Nextplat Corp, you can compare the effects of market volatilities on Ainsworth Game and Nextplat Corp 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 Nextplat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Nextplat Corp.
Diversification Opportunities for Ainsworth Game and Nextplat Corp
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ainsworth and Nextplat is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Nextplat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplat Corp 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 Nextplat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextplat Corp has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Nextplat Corp go up and down completely randomly.
Pair Corralation between Ainsworth Game and Nextplat Corp
Assuming the 90 days horizon Ainsworth Game Technology is expected to generate 0.3 times more return on investment than Nextplat Corp. However, Ainsworth Game Technology is 3.37 times less risky than Nextplat Corp. It trades about -0.17 of its potential returns per unit of risk. Nextplat Corp is currently generating about -0.08 per unit of risk. If you would invest 51.00 in Ainsworth Game Technology on August 28, 2024 and sell it today you would lose (4.00) from holding Ainsworth Game Technology or give up 7.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ainsworth Game Technology vs. Nextplat Corp
Performance |
| Timeline |
| Ainsworth Game Technology |
| Nextplat Corp |
Ainsworth Game and Nextplat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainsworth Game and Nextplat Corp
The main advantage of trading using opposite Ainsworth Game and Nextplat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Nextplat Corp 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 Nextplat Corp will offset losses from the drop in Nextplat Corp's long position.| Ainsworth Game vs. Intema Solutions | Ainsworth Game vs. 888 Holdings | Ainsworth Game vs. Royal Wins | Ainsworth Game vs. Real Luck Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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