Correlation Between Allied Gaming and Hanover House

Can any of the company-specific risk be diversified away by investing in both Allied Gaming and Hanover House 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 Hanover House 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 Hanover House, you can compare the effects of market volatilities on Allied Gaming and Hanover House 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 Hanover House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Gaming and Hanover House.

Diversification Opportunities for Allied Gaming and Hanover House

-0.71

Correlation Coefficient

Allied Gaming  Hanover House

Pay attention - limited upside

The 3 months correlation between Allied and Hanover is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Allied Gaming Entertainment and Hanover House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover House 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 Hanover House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanover House has no effect on the direction of Allied Gaming i.e., Allied Gaming and Hanover House go up and down completely randomly.

Pair Corralation between Allied Gaming and Hanover House

If you would invest  0.50  in Hanover House on September 21, 2024 and sell it today you would earn a total of  0.50  from holding Hanover House or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Allied Gaming Entertainment  vs.  Hanover House

Allied Gaming Entert

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allied Gaming Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Allied Gaming is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Hanover House

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hanover House are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Hanover House exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allied Gaming and Hanover House

The main advantage of trading using opposite Allied Gaming and Hanover House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Gaming position performs unexpectedly, Hanover House 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 Hanover House will offset losses from the drop in Hanover House's long position.

The idea behind Allied Gaming Entertainment and Hanover House 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.

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 CEOs Directory module to screen CEOs from public companies around the world.