Correlation Between Entain Plc and Ainsworth Game
Can any of the company-specific risk be diversified away by investing in both Entain Plc 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 Entain Plc and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entain Plc and Ainsworth Game Technology, you can compare the effects of market volatilities on Entain Plc 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 Entain Plc with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entain Plc and Ainsworth Game.
Diversification Opportunities for Entain Plc and Ainsworth Game
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Entain and Ainsworth is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Entain Plc 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 Entain Plc 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 Entain Plc 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 Entain Plc i.e., Entain Plc and Ainsworth Game go up and down completely randomly.
Pair Corralation between Entain Plc and Ainsworth Game
Assuming the 90 days horizon Entain Plc is expected to generate 1.4 times more return on investment than Ainsworth Game. However, Entain Plc is 1.4 times more volatile than Ainsworth Game Technology. It trades about 0.04 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about -0.2 per unit of risk. If you would invest 975.00 in Entain Plc on August 31, 2024 and sell it today you would earn a total of 16.00 from holding Entain Plc or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entain Plc vs. Ainsworth Game Technology
Performance |
| Timeline |
| Entain Plc |
| Ainsworth Game Technology |
Entain Plc and Ainsworth Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entain Plc and Ainsworth Game
The main advantage of trading using opposite Entain Plc and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entain Plc 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.The idea behind Entain Plc and Ainsworth Game Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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