Correlation Between Commonwealth Bank and Ainsworth Game
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank 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 Commonwealth Bank and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Bank of and Ainsworth Game Technology, you can compare the effects of market volatilities on Commonwealth Bank 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 Commonwealth Bank with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Ainsworth Game.
Diversification Opportunities for Commonwealth Bank and Ainsworth Game
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Commonwealth and Ainsworth is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of 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 Commonwealth Bank 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 Commonwealth Bank of 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 Commonwealth Bank i.e., Commonwealth Bank and Ainsworth Game go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Ainsworth Game
Assuming the 90 days trading horizon Commonwealth Bank of is expected to generate 0.09 times more return on investment than Ainsworth Game. However, Commonwealth Bank of is 11.27 times less risky than Ainsworth Game. It trades about 0.04 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about -0.01 per unit of risk. If you would invest 9,488 in Commonwealth Bank of on September 12, 2024 and sell it today you would earn a total of 558.00 from holding Commonwealth Bank of or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. Ainsworth Game Technology
Performance |
| Timeline |
| Commonwealth Bank |
| Ainsworth Game Technology |
Commonwealth Bank and Ainsworth Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Ainsworth Game
The main advantage of trading using opposite Commonwealth Bank and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank 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.| Commonwealth Bank vs. Farm Pride Foods | Commonwealth Bank vs. Treasury Wine Estates | Commonwealth Bank vs. Strickland Metals | Commonwealth Bank vs. Regal Funds Management |
| Ainsworth Game vs. COAST ENTERTAINMENT HOLDINGS | Ainsworth Game vs. Infomedia | Ainsworth Game vs. Seven West Media | Ainsworth Game vs. Retail Food 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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