Correlation Between EQ Resources and Ainsworth Game
Can any of the company-specific risk be diversified away by investing in both EQ Resources 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 EQ Resources and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EQ Resources and Ainsworth Game Technology, you can compare the effects of market volatilities on EQ Resources 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 EQ Resources with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of EQ Resources and Ainsworth Game.
Diversification Opportunities for EQ Resources and Ainsworth Game
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between EQR and Ainsworth is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding EQ Resources 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 EQ Resources 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 EQ Resources 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 EQ Resources i.e., EQ Resources and Ainsworth Game go up and down completely randomly.
Pair Corralation between EQ Resources and Ainsworth Game
Assuming the 90 days trading horizon EQ Resources is expected to generate 1.76 times more return on investment than Ainsworth Game. However, EQ Resources is 1.76 times more volatile than Ainsworth Game Technology. It trades about 0.06 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about -0.04 per unit of risk. If you would invest 4.50 in EQ Resources on September 1, 2024 and sell it today you would earn a total of 1.00 from holding EQ Resources or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.23% |
| Values | Daily Returns |
EQ Resources vs. Ainsworth Game Technology
Performance |
| Timeline |
| EQ Resources |
| Ainsworth Game Technology |
EQ Resources and Ainsworth Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EQ Resources and Ainsworth Game
The main advantage of trading using opposite EQ Resources and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EQ Resources 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.| EQ Resources vs. Sky Metals | EQ Resources vs. Leeuwin Metals | EQ Resources vs. Black Rock Mining | EQ Resources vs. DY6 Metals |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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