Correlation Between Rural Funds and Ainsworth Game

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

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

Diversification Opportunities for Rural Funds and Ainsworth Game

-0.43

Correlation Coefficient

Rural Funds  Ainsworth Game

Very good diversification

The 3 months correlation between Rural and Ainsworth is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Rural Funds Group 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 Rural Funds 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 Rural Funds Group 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 Rural Funds i.e., Rural Funds and Ainsworth Game go up and down completely randomly.

Pair Corralation between Rural Funds and Ainsworth Game

Assuming the 90 days trading horizon Rural Funds Group is expected to generate 0.34 times more return on investment than Ainsworth Game. However, Rural Funds Group is 2.93 times less risky than Ainsworth Game. It trades about -0.03 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about -0.06 per unit of risk. If you would invest  197.00  in Rural Funds Group on October 9, 2024 and sell it today you would lose (18.00) from holding Rural Funds Group or give up 9.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Rural Funds Group  vs.  Ainsworth Game Technology

Rural Funds Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rural Funds Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Rural Funds is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Ainsworth Game Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ainsworth Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Ainsworth Game is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Rural Funds and Ainsworth Game

The main advantage of trading using opposite Rural Funds and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rural Funds 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 Rural Funds Group 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.