Correlation Between Ainsworth Game and Gamehost

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

Diversification Opportunities for Ainsworth Game and Gamehost

0.28

Correlation Coefficient

Ainsworth Game  Gamehost

Modest diversification

The 3 months correlation between Ainsworth and Gamehost is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Gamehost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamehost 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 Gamehost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamehost has no effect on the direction of Ainsworth Game i.e., Ainsworth Game and Gamehost go up and down completely randomly.

Pair Corralation between Ainsworth Game and Gamehost

Assuming the 90 days horizon Ainsworth Game is expected to generate 1.42 times less return on investment than Gamehost. In addition to that, Ainsworth Game is 4.48 times more volatile than Gamehost. It trades about 0.03 of its total potential returns per unit of risk. Gamehost is currently generating about 0.17 per unit of volatility. If you would invest  693.00  in Gamehost on December 22, 2024 and sell it today you would earn a total of  80.00  from holding Gamehost or generate 11.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Ainsworth Game Technology  vs.  Gamehost

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.

Gamehost

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gamehost are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Gamehost may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ainsworth Game and Gamehost

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

The idea behind Ainsworth Game Technology and Gamehost 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.