Correlation Between Ainsworth Game and Nutritional Growth

Can any of the company-specific risk be diversified away by investing in both Ainsworth Game and Nutritional Growth 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 Nutritional Growth 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 Nutritional Growth Solutions, you can compare the effects of market volatilities on Ainsworth Game and Nutritional Growth 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 Nutritional Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Nutritional Growth.

Diversification Opportunities for Ainsworth Game and Nutritional Growth

0.2

Correlation Coefficient

Ainsworth Game  Nutritional Growth

Modest diversification

The 3 months correlation between Ainsworth and Nutritional is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Nutritional Growth Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutritional Growth 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 Nutritional Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutritional Growth has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Nutritional Growth go up and down completely randomly.

Pair Corralation between Ainsworth Game and Nutritional Growth

Assuming the 90 days trading horizon Ainsworth Game Technology is expected to generate 1.25 times more return on investment than Nutritional Growth. However, Ainsworth Game is 1.25 times more volatile than Nutritional Growth Solutions. It trades about 0.11 of its potential returns per unit of risk. Nutritional Growth Solutions is currently generating about -0.19 per unit of risk. If you would invest  74.00  in Ainsworth Game Technology on October 5, 2024 and sell it today you would earn a total of  6.00  from holding Ainsworth Game Technology or generate 8.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	75.0%
Values	Daily Returns

Ainsworth Game Technology  vs.  Nutritional Growth Solutions

Ainsworth Game Technology

Risk-Adjusted Performance

1 of 100

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.

Nutritional Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nutritional Growth Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nutritional Growth 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 Nutritional Growth

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

The idea behind Ainsworth Game Technology and Nutritional Growth Solutions 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.