Correlation Between Alpha Esports and The9
Can any of the company-specific risk be diversified away by investing in both Alpha Esports and The9 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 Alpha Esports and The9 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Esports Tech and The9 Ltd ADR, you can compare the effects of market volatilities on Alpha Esports and The9 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 Alpha Esports with a short position of The9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Esports and The9.
Diversification Opportunities for Alpha Esports and The9
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alpha and The9 is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Esports Tech and The9 Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The9 Ltd ADR and Alpha Esports 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 Alpha Esports Tech are associated (or correlated) with The9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The9 Ltd ADR has no effect on the direction of Alpha Esports i.e., Alpha Esports and The9 go up and down completely randomly.
Pair Corralation between Alpha Esports and The9
Assuming the 90 days horizon Alpha Esports Tech is expected to generate 3.1 times more return on investment than The9. However, Alpha Esports is 3.1 times more volatile than The9 Ltd ADR. It trades about 0.09 of its potential returns per unit of risk. The9 Ltd ADR is currently generating about 0.24 per unit of risk. If you would invest 0.84 in Alpha Esports Tech on August 24, 2024 and sell it today you would earn a total of 0.05 from holding Alpha Esports Tech or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha Esports Tech vs. The9 Ltd ADR
Performance |
| Timeline |
| Alpha Esports Tech |
| The9 Ltd ADR |
Alpha Esports and The9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Esports and The9
The main advantage of trading using opposite Alpha Esports and The9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Esports position performs unexpectedly, The9 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 The9 will offset losses from the drop in The9's long position.| Alpha Esports vs. GDEV Inc | Alpha Esports vs. Doubledown Interactive Co | Alpha Esports vs. Playstudios | Alpha Esports vs. SohuCom |
| The9 vs. Atari SA | The9 vs. Victory Square Technologies | The9 vs. Motorsport Gaming Us | The9 vs. Alpha Esports Tech |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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