Correlation Between Aristocrat Leisure and Ainsworth Game
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure 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 Aristocrat Leisure and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure Limited and Ainsworth Game Technology, you can compare the effects of market volatilities on Aristocrat Leisure 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 Aristocrat Leisure with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and Ainsworth Game.
Diversification Opportunities for Aristocrat Leisure and Ainsworth Game
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aristocrat and Ainsworth is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure Limited 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 Aristocrat Leisure 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 Aristocrat Leisure Limited 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 Aristocrat Leisure i.e., Aristocrat Leisure and Ainsworth Game go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and Ainsworth Game
Assuming the 90 days horizon Aristocrat Leisure Limited is expected to generate 0.94 times more return on investment than Ainsworth Game. However, Aristocrat Leisure Limited is 1.07 times less risky than Ainsworth Game. It trades about 0.07 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about -0.02 per unit of risk. If you would invest 2,556 in Aristocrat Leisure Limited on August 27, 2024 and sell it today you would earn a total of 1,944 from holding Aristocrat Leisure Limited or generate 76.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 81.32% |
| Values | Daily Returns |
Aristocrat Leisure Limited vs. Ainsworth Game Technology
Performance |
| Timeline |
| Aristocrat Leisure |
| Ainsworth Game Technology |
Aristocrat Leisure and Ainsworth Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and Ainsworth Game
The main advantage of trading using opposite Aristocrat Leisure and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure 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.| Aristocrat Leisure vs. Real Luck Group | Aristocrat Leisure vs. Betmakers Technology Group | Aristocrat Leisure vs. Jackpot Digital |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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