Correlation Between Medical Developments and Ainsworth Game

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Can any of the company-specific risk be diversified away by investing in both Medical Developments 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 Medical Developments and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Developments International and Ainsworth Game Technology, you can compare the effects of market volatilities on Medical Developments 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 Medical Developments with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Developments and Ainsworth Game.

Diversification Opportunities for Medical Developments and Ainsworth Game

MedicalAinsworthDiversified AwayMedicalAinsworthDiversified Away100%
0.26
  Correlation Coefficient

Modest diversification

The 3 months correlation between Medical and Ainsworth is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Medical Developments Internati 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 Medical Developments 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 Medical Developments International 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 Medical Developments i.e., Medical Developments and Ainsworth Game go up and down completely randomly.

Pair Corralation between Medical Developments and Ainsworth Game

Assuming the 90 days trading horizon Medical Developments International is expected to under-perform the Ainsworth Game. In addition to that, Medical Developments is 1.54 times more volatile than Ainsworth Game Technology. It trades about 0.0 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  102.00  in Ainsworth Game Technology on November 29, 2024 and sell it today you would lose (13.00) from holding Ainsworth Game Technology or give up 12.75% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Medical Developments Internati  vs.  Ainsworth Game Technology

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -40-30-20-100102030
JavaScript chart by amCharts 3.21.15MVP AGI
       Timeline  
Medical Developments 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Medical Developments International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Medical Developments unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.40.50.60.70.80.9
Ainsworth Game Technology 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Ainsworth Game Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Ainsworth Game unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.70.750.80.850.9

Medical Developments and Ainsworth Game Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-26.54-19.88-13.21-6.550.116.8713.9821.0828.1935.29 0.0050.0100.0150.0200.025
JavaScript chart by amCharts 3.21.15MVP AGI
       Returns  

Pair Trading with Medical Developments and Ainsworth Game

The main advantage of trading using opposite Medical Developments and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Developments 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 Medical Developments International 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.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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