Correlation Between Allied Gaming and 14040HCY9

Can any of the company-specific risk be diversified away by investing in both Allied Gaming and 14040HCY9 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 Allied Gaming and 14040HCY9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allied Gaming Entertainment and COF 5817 01 FEB 34, you can compare the effects of market volatilities on Allied Gaming and 14040HCY9 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 Allied Gaming with a short position of 14040HCY9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Gaming and 14040HCY9.

Diversification Opportunities for Allied Gaming and 14040HCY9

0.52

Correlation Coefficient

Allied Gaming  14040HCY9

Very weak diversification

The 3 months correlation between Allied and 14040HCY9 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Allied Gaming Entertainment and COF 5817 01 FEB 34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COF 5817 01 and Allied 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 Allied Gaming Entertainment are associated (or correlated) with 14040HCY9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COF 5817 01 has no effect on the direction of Allied Gaming i.e., Allied Gaming and 14040HCY9 go up and down completely randomly.

Pair Corralation between Allied Gaming and 14040HCY9

Given the investment horizon of 90 days Allied Gaming Entertainment is expected to generate 12.9 times more return on investment than 14040HCY9. However, Allied Gaming is 12.9 times more volatile than COF 5817 01 FEB 34. It trades about 0.06 of its potential returns per unit of risk. COF 5817 01 FEB 34 is currently generating about -0.45 per unit of risk. If you would invest  89.00  in Allied Gaming Entertainment on October 10, 2024 and sell it today you would earn a total of  3.00  from holding Allied Gaming Entertainment or generate 3.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Allied Gaming Entertainment  vs.  COF 5817 01 FEB 34

Allied Gaming Entert

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allied Gaming Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

COF 5817 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COF 5817 01 FEB 34 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 14040HCY9 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Allied Gaming and 14040HCY9

The main advantage of trading using opposite Allied Gaming and 14040HCY9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Gaming position performs unexpectedly, 14040HCY9 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 14040HCY9 will offset losses from the drop in 14040HCY9's long position.

The idea behind Allied Gaming Entertainment and COF 5817 01 FEB 34 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.