Correlation Between New Wave and Allied Gaming
Can any of the company-specific risk be diversified away by investing in both New Wave 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 New Wave and Allied Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Wave Holdings and Allied Gaming Entertainment, you can compare the effects of market volatilities on New Wave 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 New Wave with a short position of Allied Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Wave and Allied Gaming.
Diversification Opportunities for New Wave and Allied Gaming
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between New and Allied is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding New Wave Holdings 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 New Wave 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 New Wave Holdings 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 New Wave i.e., New Wave and Allied Gaming go up and down completely randomly.
Pair Corralation between New Wave and Allied Gaming
Assuming the 90 days horizon New Wave Holdings is expected to generate 6.47 times more return on investment than Allied Gaming. However, New Wave is 6.47 times more volatile than Allied Gaming Entertainment. It trades about 0.13 of its potential returns per unit of risk. Allied Gaming Entertainment is currently generating about -0.3 per unit of risk. If you would invest 0.98 in New Wave Holdings on August 27, 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 |
New Wave Holdings vs. Allied Gaming Entertainment
Performance |
| Timeline |
| New Wave Holdings |
| Allied Gaming Entert |
New Wave and Allied Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Wave and Allied Gaming
The main advantage of trading using opposite New Wave and Allied Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Wave 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.| New Wave vs. ZoomerMedia Limited | New Wave vs. OverActive Media Corp | New Wave vs. Network Media Group | New Wave vs. Celtic plc |
| Allied Gaming vs. American Picture House | Allied Gaming vs. Hall of Fame | Allied Gaming vs. New Wave Holdings | Allied Gaming vs. ZoomerMedia Limited |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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