Correlation Between Metro Mining and Ainsworth Game
Can any of the company-specific risk be diversified away by investing in both Metro Mining 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 Metro Mining and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Mining and Ainsworth Game Technology, you can compare the effects of market volatilities on Metro Mining 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 Metro Mining with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Mining and Ainsworth Game.
Diversification Opportunities for Metro Mining and Ainsworth Game
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Metro and Ainsworth is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Metro Mining 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 Metro Mining 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 Metro Mining 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 Metro Mining i.e., Metro Mining and Ainsworth Game go up and down completely randomly.
Pair Corralation between Metro Mining and Ainsworth Game
Assuming the 90 days trading horizon Metro Mining is expected to generate 1.19 times more return on investment than Ainsworth Game. However, Metro Mining is 1.19 times more volatile than Ainsworth Game Technology. It trades about 0.31 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about 0.08 per unit of risk. If you would invest 5.10 in Metro Mining on August 31, 2024 and sell it today you would earn a total of 1.20 from holding Metro Mining or generate 23.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Mining vs. Ainsworth Game Technology
Performance |
| Timeline |
| Metro Mining |
| Ainsworth Game Technology |
Metro Mining and Ainsworth Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Mining and Ainsworth Game
The main advantage of trading using opposite Metro Mining and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Mining 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.| Metro Mining vs. Northern Star Resources | Metro Mining vs. Evolution Mining | Metro Mining vs. De Grey Mining |
| Ainsworth Game vs. Aneka Tambang Tbk | Ainsworth Game vs. Unibail Rodamco Westfield SE | Ainsworth Game vs. Macquarie Group | Ainsworth Game vs. Commonwealth Bank |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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