Correlation Between Ainsworth Game and Bridger Aerospace

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

Diversification Opportunities for Ainsworth Game and Bridger Aerospace

-0.41

Correlation Coefficient

Ainsworth Game  Bridger Aerospace

Very good diversification

The 3 months correlation between Ainsworth and Bridger is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Bridger Aerospace Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridger Aerospace 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 Bridger Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridger Aerospace has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Bridger Aerospace go up and down completely randomly.

Pair Corralation between Ainsworth Game and Bridger Aerospace

Assuming the 90 days horizon Ainsworth Game is expected to generate 26.66 times less return on investment than Bridger Aerospace. But when comparing it to its historical volatility, Ainsworth Game Technology is 5.07 times less risky than Bridger Aerospace. It trades about 0.03 of its potential returns per unit of risk. Bridger Aerospace Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Bridger Aerospace Group on October 25, 2024 and sell it today you would earn a total of  14.00  from holding Bridger Aerospace Group or generate 116.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Ainsworth Game Technology  vs.  Bridger Aerospace Group

Ainsworth Game Technology

Risk-Adjusted Performance

2 of 100

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 February 2025.

Bridger Aerospace

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bridger Aerospace Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Bridger Aerospace showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ainsworth Game and Bridger Aerospace

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

The idea behind Ainsworth Game Technology and Bridger Aerospace 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.