Correlation Between Allied Gaming and New Wave
Can any of the company-specific risk be diversified away by investing in both Allied Gaming and New Wave 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 New Wave 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 New Wave Holdings, you can compare the effects of market volatilities on Allied Gaming and New Wave 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 New Wave. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Gaming and New Wave.
Diversification Opportunities for Allied Gaming and New Wave
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Allied and New is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Allied Gaming Entertainment and New Wave Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Wave Holdings 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 New Wave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Wave Holdings has no effect on the direction of Allied Gaming i.e., Allied Gaming and New Wave go up and down completely randomly.
Pair Corralation between Allied Gaming and New Wave
Given the investment horizon of 90 days Allied Gaming Entertainment is expected to under-perform the New Wave. But the stock apears to be less risky and, when comparing its historical volatility, Allied Gaming Entertainment is 7.24 times less risky than New Wave. The stock trades about -0.23 of its potential returns per unit of risk. The New Wave Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.98 in New Wave Holdings on August 31, 2024 and sell it today you would earn a total of 0.23 from holding New Wave Holdings or generate 23.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Gaming Entertainment vs. New Wave Holdings
Performance |
| Timeline |
| Allied Gaming Entert |
| New Wave Holdings |
Allied Gaming and New Wave Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Gaming and New Wave
The main advantage of trading using opposite Allied Gaming and New Wave positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Gaming position performs unexpectedly, New Wave 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 New Wave will offset losses from the drop in New Wave's long position.| Allied Gaming vs. American Picture House | Allied Gaming vs. Hall of Fame | Allied Gaming vs. New Wave Holdings | Allied Gaming vs. ZoomerMedia Limited |
| New Wave vs. ZoomerMedia Limited | New Wave vs. OverActive Media Corp | New Wave vs. Network Media Group | New Wave vs. Celtic plc |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |