Correlation Between Ainsworth Game and Academy Sports

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

Diversification Opportunities for Ainsworth Game and Academy Sports

-0.34

Correlation Coefficient

Ainsworth Game  Academy Sports

Very good diversification

The 3 months correlation between Ainsworth and Academy is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Academy Sports Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports Outdoors 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 Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports Outdoors has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Academy Sports go up and down completely randomly.

Pair Corralation between Ainsworth Game and Academy Sports

Assuming the 90 days horizon Ainsworth Game Technology is expected to generate 2.18 times more return on investment than Academy Sports. However, Ainsworth Game is 2.18 times more volatile than Academy Sports Outdoors. It trades about 0.03 of its potential returns per unit of risk. Academy Sports Outdoors is currently generating about -0.12 per unit of risk. If you would invest  54.00  in Ainsworth Game Technology on December 21, 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.  Academy Sports Outdoors

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 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ainsworth Game may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Academy Sports Outdoors

Risk-Adjusted Performance

Very Weak

Over the last 90 days Academy Sports Outdoors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Ainsworth Game and Academy Sports

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

The idea behind Ainsworth Game Technology and Academy Sports Outdoors 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.