Correlation Between Ainsworth Game and Block

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

Diversification Opportunities for Ainsworth Game and Block

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between Ainsworth and Block is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Block Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Block Inc 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 Block. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Block Inc has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Block go up and down completely randomly.

Pair Corralation between Ainsworth Game and Block

Assuming the 90 days trading horizon Ainsworth Game is expected to generate 5.43 times less return on investment than Block. In addition to that, Ainsworth Game is 1.06 times more volatile than Block Inc. It trades about 0.01 of its total potential returns per unit of risk. Block Inc is currently generating about 0.04 per unit of volatility. If you would invest  10,550  in Block Inc on October 4, 2024 and sell it today you would earn a total of  3,548  from holding Block Inc or generate 33.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ainsworth Game Technology  vs.  Block Inc

 Performance 
       Timeline  
Ainsworth Game Technology 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Ainsworth Game Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Ainsworth Game may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Block Inc 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Block Inc are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Block unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ainsworth Game and Block Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ainsworth Game and Block

The main advantage of trading using opposite Ainsworth Game and Block positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game position performs unexpectedly, Block 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 Block will offset losses from the drop in Block's long position.
The idea behind Ainsworth Game Technology and Block Inc 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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