Correlation Between Super League and Allied Gaming

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

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

Diversification Opportunities for Super League and Allied Gaming

0.8

Correlation Coefficient

Super League  Allied Gaming

Very poor diversification

The 3 months correlation between Super and Allied is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Super League Enterprise and Allied Gaming Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Gaming Entert and Super League 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 Super League Enterprise are associated (or correlated) with Allied Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Gaming Entert has no effect on the direction of Super League i.e., Super League and Allied Gaming go up and down completely randomly.

Pair Corralation between Super League and Allied Gaming

Considering the 90-day investment horizon Super League Enterprise is expected to generate 1.3 times more return on investment than Allied Gaming. However, Super League is 1.3 times more volatile than Allied Gaming Entertainment. It trades about 0.2 of its potential returns per unit of risk. Allied Gaming Entertainment is currently generating about 0.09 per unit of risk. If you would invest  59.00  in Super League Enterprise on October 12, 2024 and sell it today you would earn a total of  14.00  from holding Super League Enterprise or generate 23.73% return on investment over 90 days.

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

Super League Enterprise  vs.  Allied Gaming Entertainment

Super League Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Super League Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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.

Pair Trading with Super League and Allied Gaming

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

The idea behind Super League Enterprise and Allied Gaming Entertainment 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 Anywhere module to track or share privately all of your investments from the convenience of any device.