Correlation Between Energy Resources and Ainsworth Game
Can any of the company-specific risk be diversified away by investing in both Energy 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 Energy 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 Energy Resources and Ainsworth Game Technology, you can compare the effects of market volatilities on Energy 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 Energy Resources with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Resources and Ainsworth Game.
Diversification Opportunities for Energy Resources and Ainsworth Game
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Energy and Ainsworth is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Energy 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 Energy 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 Energy 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 Energy Resources i.e., Energy Resources and Ainsworth Game go up and down completely randomly.
Pair Corralation between Energy Resources and Ainsworth Game
Assuming the 90 days trading horizon Energy Resources is expected to generate 5.26 times more return on investment than Ainsworth Game. However, Energy Resources is 5.26 times more volatile than Ainsworth Game Technology. It trades about 0.02 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about -0.03 per unit of risk. If you would invest 3.40 in Energy Resources on September 15, 2024 and sell it today you would lose (3.20) from holding Energy Resources or give up 94.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Resources vs. Ainsworth Game Technology
Performance |
| Timeline |
| Energy Resources |
| Ainsworth Game Technology |
Energy Resources and Ainsworth Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Resources and Ainsworth Game
The main advantage of trading using opposite Energy Resources and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy 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.| Energy Resources vs. Macquarie Bank Limited | Energy Resources vs. Prime Financial Group | Energy Resources vs. Wt Financial Group | Energy Resources vs. EMvision Medical Devices |
| Ainsworth Game vs. Energy Resources | Ainsworth Game vs. 88 Energy | Ainsworth Game vs. Amani Gold | Ainsworth Game vs. A1 Investments Resources |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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