Correlation Between 655844CK2 and Ainsworth Game

Can any of the company-specific risk be diversified away by investing in both 655844CK2 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 655844CK2 and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NSC 23 15 MAY 31 and Ainsworth Game Technology, you can compare the effects of market volatilities on 655844CK2 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 655844CK2 with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of 655844CK2 and Ainsworth Game.

Diversification Opportunities for 655844CK2 and Ainsworth Game

-0.03

Correlation Coefficient

655844CK2  Ainsworth Game

Good diversification

The 3 months correlation between 655844CK2 and Ainsworth is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NSC 23 15 MAY 31 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 655844CK2 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 NSC 23 15 MAY 31 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 655844CK2 i.e., 655844CK2 and Ainsworth Game go up and down completely randomly.

Pair Corralation between 655844CK2 and Ainsworth Game

Assuming the 90 days trading horizon NSC 23 15 MAY 31 is expected to generate 0.3 times more return on investment than Ainsworth Game. However, NSC 23 15 MAY 31 is 3.38 times less risky than Ainsworth Game. It trades about -0.12 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about -0.07 per unit of risk. If you would invest  8,562  in NSC 23 15 MAY 31 on October 26, 2024 and sell it today you would lose (197.00) from holding NSC 23 15 MAY 31 or give up 2.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

NSC 23 15 MAY 31  vs.  Ainsworth Game Technology

NSC 23 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NSC 23 15 MAY 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 655844CK2 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the 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. 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 655844CK2 and Ainsworth Game

The main advantage of trading using opposite 655844CK2 and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 655844CK2 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 NSC 23 15 MAY 31 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.