Correlation Between Magellan Financial and Ainsworth Game
Can any of the company-specific risk be diversified away by investing in both Magellan Financial 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 Magellan Financial and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magellan Financial Group and Ainsworth Game Technology, you can compare the effects of market volatilities on Magellan Financial 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 Magellan Financial with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magellan Financial and Ainsworth Game.
Diversification Opportunities for Magellan Financial and Ainsworth Game
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magellan and Ainsworth is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Magellan Financial Group 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 Magellan Financial 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 Magellan Financial Group 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 Magellan Financial i.e., Magellan Financial and Ainsworth Game go up and down completely randomly.
Pair Corralation between Magellan Financial and Ainsworth Game
Assuming the 90 days trading horizon Magellan Financial Group is expected to generate 0.7 times more return on investment than Ainsworth Game. However, Magellan Financial Group is 1.42 times less risky than Ainsworth Game. It trades about 0.0 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 815.00 in Magellan Financial Group on January 21, 2025 and sell it today you would lose (73.00) from holding Magellan Financial Group or give up 8.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magellan Financial Group vs. Ainsworth Game Technology
Performance |
| Timeline |
| Magellan Financial |
| Ainsworth Game Technology |
Magellan Financial and Ainsworth Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magellan Financial and Ainsworth Game
The main advantage of trading using opposite Magellan Financial and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magellan Financial 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.| Magellan Financial vs. Queste Communications | Magellan Financial vs. Australian Unity Office | Magellan Financial vs. Group 6 Metals | Magellan Financial vs. Metals X |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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