Correlation Between Australian Unity and Ainsworth Game
Can any of the company-specific risk be diversified away by investing in both Australian Unity and Ainsworth Game 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 Australian Unity and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Unity Office and Ainsworth Game Technology, you can compare the effects of market volatilities on Australian Unity and Ainsworth Game 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 Australian Unity with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Unity and Ainsworth Game.
Diversification Opportunities for Australian Unity and Ainsworth Game
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Australian and Ainsworth is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Australian Unity Office and Ainsworth Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainsworth Game Technology and Australian Unity 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 Australian Unity Office are associated (or correlated) with Ainsworth Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainsworth Game Technology has no effect on the direction of Australian Unity i.e., Australian Unity and Ainsworth Game go up and down completely randomly.
Pair Corralation between Australian Unity and Ainsworth Game
Assuming the 90 days trading horizon Australian Unity Office is expected to under-perform the Ainsworth Game. But the stock apears to be less risky and, when comparing its historical volatility, Australian Unity Office is 1.4 times less risky than Ainsworth Game. The stock trades about -0.01 of its potential returns per unit of risk. The Ainsworth Game Technology is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 102.00 in Ainsworth Game Technology on September 1, 2024 and sell it today you would lose (27.00) from holding Ainsworth Game Technology or give up 26.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Unity Office vs. Ainsworth Game Technology
Performance |
| Timeline |
| Australian Unity Office |
| Ainsworth Game Technology |
Australian Unity and Ainsworth Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Unity and Ainsworth Game
The main advantage of trading using opposite Australian Unity and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Unity position performs unexpectedly, Ainsworth Game 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 Ainsworth Game will offset losses from the drop in Ainsworth Game's long position.| Australian Unity vs. Scentre Group | Australian Unity vs. Vicinity Centres Re | Australian Unity vs. Charter Hall Retail | Australian Unity vs. Cromwell Property Group |
| Ainsworth Game vs. G8 Education | Ainsworth Game vs. Richmond Vanadium Technology | Ainsworth Game vs. Charter Hall Education | Ainsworth Game vs. Queste Communications |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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