Correlation Between Ainsworth Game and Transurban

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

Diversification Opportunities for Ainsworth Game and Transurban

-0.04

Correlation Coefficient

Ainsworth Game  Transurban

Good diversification

The 3 months correlation between Ainsworth and Transurban is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Transurban Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transurban Group 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 Transurban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transurban Group has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Transurban go up and down completely randomly.

Pair Corralation between Ainsworth Game and Transurban

Assuming the 90 days trading horizon Ainsworth Game is expected to generate 1.76 times less return on investment than Transurban. In addition to that, Ainsworth Game is 3.62 times more volatile than Transurban Group. It trades about 0.01 of its total potential returns per unit of risk. Transurban Group is currently generating about 0.04 per unit of volatility. If you would invest  1,175  in Transurban Group on December 3, 2024 and sell it today you would earn a total of  140.00  from holding Transurban Group or generate 11.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.7%
Values	Daily Returns

Ainsworth Game Technology  vs.  Transurban Group

Ainsworth Game Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ainsworth Game Technology are ranked lower than 8 (%) 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.

Transurban Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Transurban Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Transurban 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 Transurban

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

The idea behind Ainsworth Game Technology and Transurban Group 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.