Correlation Between Allied Gaming and Corus Entertainment
Can any of the company-specific risk be diversified away by investing in both Allied Gaming and Corus Entertainment 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 Corus Entertainment 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 Corus Entertainment, you can compare the effects of market volatilities on Allied Gaming and Corus Entertainment 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 Corus Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Gaming and Corus Entertainment.
Diversification Opportunities for Allied Gaming and Corus Entertainment
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allied and Corus is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Allied Gaming Entertainment and Corus Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corus Entertainment 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 Corus Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corus Entertainment has no effect on the direction of Allied Gaming i.e., Allied Gaming and Corus Entertainment go up and down completely randomly.
Pair Corralation between Allied Gaming and Corus Entertainment
Assuming the 90 days horizon Allied Gaming Entertainment is expected to generate 4.2 times more return on investment than Corus Entertainment. However, Allied Gaming is 4.2 times more volatile than Corus Entertainment. It trades about 0.03 of its potential returns per unit of risk. Corus Entertainment is currently generating about 0.1 per unit of risk. If you would invest 0.40 in Allied Gaming Entertainment on August 31, 2024 and sell it today you would lose (0.38) from holding Allied Gaming Entertainment or give up 95.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 10.69% |
| Values | Daily Returns |
Allied Gaming Entertainment vs. Corus Entertainment
Performance |
| Timeline |
| Allied Gaming Entert |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Corus Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Allied Gaming and Corus Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Gaming and Corus Entertainment
The main advantage of trading using opposite Allied Gaming and Corus Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Gaming position performs unexpectedly, Corus Entertainment 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 Corus Entertainment will offset losses from the drop in Corus Entertainment's long position.The idea behind Allied Gaming Entertainment and Corus 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.| Corus Entertainment vs. Kinetik Holdings | Corus Entertainment vs. AerSale Corp | Corus Entertainment vs. Southwest Gas Holdings | Corus Entertainment vs. Pentair 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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