Correlation Between Motorsport Gaming and Ainsworth Game

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

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

Diversification Opportunities for Motorsport Gaming and Ainsworth Game

0.06

Correlation Coefficient

Motorsport Gaming  Ainsworth Game

Significant diversification

The 3 months correlation between Motorsport and Ainsworth is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Motorsport Gaming Us 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 Motorsport Gaming 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 Motorsport Gaming Us 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 Motorsport Gaming i.e., Motorsport Gaming and Ainsworth Game go up and down completely randomly.

Pair Corralation between Motorsport Gaming and Ainsworth Game

Given the investment horizon of 90 days Motorsport Gaming Us is expected to generate 1.55 times more return on investment than Ainsworth Game. However, Motorsport Gaming is 1.55 times more volatile than Ainsworth Game Technology. It trades about 0.06 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about -0.01 per unit of risk. If you would invest  132.00  in Motorsport Gaming Us on October 10, 2024 and sell it today you would earn a total of  6.00  from holding Motorsport Gaming Us or generate 4.55% return on investment over 90 days.

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

Motorsport Gaming Us  vs.  Ainsworth Game Technology

Motorsport Gaming

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Motorsport Gaming Us are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Motorsport Gaming displayed solid returns over the last few months and may actually be approaching a breakup point.

Ainsworth Game Technology

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Motorsport Gaming and Ainsworth Game

The main advantage of trading using opposite Motorsport Gaming and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Motorsport Gaming 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 Motorsport Gaming Us 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.