Correlation Between Emerson Radio and Ainsworth Game
Can any of the company-specific risk be diversified away by investing in both Emerson Radio 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 Emerson Radio and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Radio and Ainsworth Game Technology, you can compare the effects of market volatilities on Emerson Radio 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 Emerson Radio with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and Ainsworth Game.
Diversification Opportunities for Emerson Radio and Ainsworth Game
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Emerson and Ainsworth is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio 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 Emerson Radio 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 Emerson Radio 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 Emerson Radio i.e., Emerson Radio and Ainsworth Game go up and down completely randomly.
Pair Corralation between Emerson Radio and Ainsworth Game
Considering the 90-day investment horizon Emerson Radio is expected to under-perform the Ainsworth Game. In addition to that, Emerson Radio is 1.89 times more volatile than Ainsworth Game Technology. It trades about -0.21 of its total potential returns per unit of risk. Ainsworth Game Technology is currently generating about 0.01 per unit of volatility. If you would invest 49.00 in Ainsworth Game Technology on September 5, 2024 and sell it today you would earn a total of 0.00 from holding Ainsworth Game Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Radio vs. Ainsworth Game Technology
Performance |
| Timeline |
| Emerson Radio |
| Ainsworth Game Technology |
Emerson Radio and Ainsworth Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Radio and Ainsworth Game
The main advantage of trading using opposite Emerson Radio and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Radio 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.| Emerson Radio vs. Amer Sports, | Emerson Radio vs. Brunswick | Emerson Radio vs. Ralph Lauren Corp | Emerson Radio vs. Under Armour C |
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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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