Correlation Between Ambertech and Ainsworth Game

Can any of the company-specific risk be diversified away by investing in both Ambertech and Ainsworth Game 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 Ambertech and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ambertech and Ainsworth Game Technology, you can compare the effects of market volatilities on Ambertech and Ainsworth Game 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 Ambertech with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambertech and Ainsworth Game.

Diversification Opportunities for Ambertech and Ainsworth Game

0.11

Correlation Coefficient

Ambertech  Ainsworth Game

Average diversification

The 3 months correlation between Ambertech and Ainsworth is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ambertech and Ainsworth Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainsworth Game Technology and Ambertech 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 Ambertech are associated (or correlated) with Ainsworth Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainsworth Game Technology has no effect on the direction of Ambertech i.e., Ambertech and Ainsworth Game go up and down completely randomly.

Pair Corralation between Ambertech and Ainsworth Game

Assuming the 90 days trading horizon Ambertech is expected to generate 1.21 times more return on investment than Ainsworth Game. However, Ambertech is 1.21 times more volatile than Ainsworth Game Technology. It trades about -0.03 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about -0.05 per unit of risk. If you would invest  25.00  in Ambertech on October 8, 2024 and sell it today you would lose (9.00) from holding Ambertech or give up 36.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ambertech  vs.  Ainsworth Game Technology

Ambertech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ambertech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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. 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.

Pair Trading with Ambertech and Ainsworth Game

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

The idea behind Ambertech and Ainsworth Game Technology 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.