Correlation Between Soluna Holdings and Esports Entertainment
Can any of the company-specific risk be diversified away by investing in both Soluna Holdings and Esports 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 Soluna Holdings and Esports Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soluna Holdings Preferred and Esports Entertainment Group, you can compare the effects of market volatilities on Soluna Holdings and Esports 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 Soluna Holdings with a short position of Esports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soluna Holdings and Esports Entertainment.
Diversification Opportunities for Soluna Holdings and Esports Entertainment
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Soluna and Esports is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Soluna Holdings Preferred and Esports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esports Entertainment and Soluna Holdings 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 Soluna Holdings Preferred are associated (or correlated) with Esports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esports Entertainment has no effect on the direction of Soluna Holdings i.e., Soluna Holdings and Esports Entertainment go up and down completely randomly.
Pair Corralation between Soluna Holdings and Esports Entertainment
If you would invest 1,157 in Soluna Holdings Preferred on August 25, 2024 and sell it today you would earn a total of 37.00 from holding Soluna Holdings Preferred or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
Soluna Holdings Preferred vs. Esports Entertainment Group
Performance |
| Timeline |
| Soluna Holdings Preferred |
| Esports Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Soluna Holdings and Esports Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soluna Holdings and Esports Entertainment
The main advantage of trading using opposite Soluna Holdings and Esports Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soluna Holdings position performs unexpectedly, Esports 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 Esports Entertainment will offset losses from the drop in Esports Entertainment's long position.The idea behind Soluna Holdings Preferred and Esports Entertainment Group 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.| Esports Entertainment vs. Soluna Holdings Preferred | Esports Entertainment vs. FAT Brands | Esports Entertainment vs. Fortress Biotech Pref |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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