Correlation Between Canada Goose and Ainsworth Game

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Can any of the company-specific risk be diversified away by investing in both Canada Goose 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 Canada Goose and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canada Goose Holdings and Ainsworth Game Technology, you can compare the effects of market volatilities on Canada Goose 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 Canada Goose with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Goose and Ainsworth Game.

Diversification Opportunities for Canada Goose and Ainsworth Game

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Canada and Ainsworth is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Canada Goose Holdings 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 Canada Goose 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 Canada Goose Holdings 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 Canada Goose i.e., Canada Goose and Ainsworth Game go up and down completely randomly.

Pair Corralation between Canada Goose and Ainsworth Game

Given the investment horizon of 90 days Canada Goose Holdings is expected to under-perform the Ainsworth Game. But the stock apears to be less risky and, when comparing its historical volatility, Canada Goose Holdings is 1.16 times less risky than Ainsworth Game. The stock trades about -0.07 of its potential returns per unit of risk. The Ainsworth Game Technology is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  60.00  in Ainsworth Game Technology on October 13, 2024 and sell it today you would lose (9.00) from holding Ainsworth Game Technology or give up 15.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Canada Goose Holdings  vs.  Ainsworth Game Technology

 Performance 
       Timeline  
Canada Goose Holdings 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Canada Goose Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ainsworth Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ainsworth Game is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Canada Goose and Ainsworth Game Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Canada Goose and Ainsworth Game

The main advantage of trading using opposite Canada Goose and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Goose 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 Canada Goose Holdings 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.
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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