Correlation Between Ainsworth Game and Cooper Metals

Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Cooper Metals 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 Ainsworth Game and Cooper Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ainsworth Game Technology and Cooper Metals, you can compare the effects of market volatilities on Ainsworth Game and Cooper Metals 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 Ainsworth Game with a short position of Cooper Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Cooper Metals.

Diversification Opportunities for Ainsworth Game and Cooper Metals

-0.19

Correlation Coefficient

Ainsworth Game  Cooper Metals

Good diversification

The 3 months correlation between Ainsworth and Cooper is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Cooper Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Metals and Ainsworth Game 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 Ainsworth Game Technology are associated (or correlated) with Cooper Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Metals has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Cooper Metals go up and down completely randomly.

Pair Corralation between Ainsworth Game and Cooper Metals

Assuming the 90 days trading horizon Ainsworth Game Technology is expected to generate 0.94 times more return on investment than Cooper Metals. However, Ainsworth Game Technology is 1.06 times less risky than Cooper Metals. It trades about 0.02 of its potential returns per unit of risk. Cooper Metals is currently generating about 0.0 per unit of risk. If you would invest  81.00  in Ainsworth Game Technology on December 23, 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ainsworth Game Technology  vs.  Cooper Metals

Ainsworth Game Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ainsworth Game Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, Ainsworth Game is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Cooper Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cooper Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Cooper Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ainsworth Game and Cooper Metals

The main advantage of trading using opposite Ainsworth Game and Cooper Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Cooper Metals 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 Cooper Metals will offset losses from the drop in Cooper Metals' long position.

The idea behind Ainsworth Game Technology and Cooper Metals 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.