Correlation Between Gan and Sharplink Gaming

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

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

Diversification Opportunities for Gan and Sharplink Gaming

0.01

Correlation Coefficient

Gan  Sharplink Gaming

Significant diversification

The 3 months correlation between Gan and Sharplink is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Gan and Sharplink Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharplink Gaming and Gan 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 Gan are associated (or correlated) with Sharplink Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharplink Gaming has no effect on the direction of Gan i.e., Gan and Sharplink Gaming go up and down completely randomly.

Pair Corralation between Gan and Sharplink Gaming

Considering the 90-day investment horizon Gan is expected to generate 61.11 times less return on investment than Sharplink Gaming. But when comparing it to its historical volatility, Gan is 23.39 times less risky than Sharplink Gaming. It trades about 0.04 of its potential returns per unit of risk. Sharplink Gaming is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  68.00  in Sharplink Gaming on September 19, 2024 and sell it today you would earn a total of  9.00  from holding Sharplink Gaming or generate 13.24% return on investment over 90 days.

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

Gan  vs.  Sharplink Gaming

Gan

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gan are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Gan is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Sharplink Gaming

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with Gan and Sharplink Gaming

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

The idea behind Gan and Sharplink Gaming 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.