Correlation Between Allied Gaming and Marcus

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

Diversification Opportunities for Allied Gaming and Marcus

-0.77

Correlation Coefficient

Allied Gaming  Marcus

Pay attention - limited upside

The 3 months correlation between Allied and Marcus is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Allied Gaming Entertainment and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus 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 Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of Allied Gaming i.e., Allied Gaming and Marcus go up and down completely randomly.

Pair Corralation between Allied Gaming and Marcus

Assuming the 90 days horizon Allied Gaming Entertainment is expected to generate 13.42 times more return on investment than Marcus. However, Allied Gaming is 13.42 times more volatile than Marcus. It trades about 0.06 of its potential returns per unit of risk. Marcus is currently generating about 0.06 per unit of risk. If you would invest  1.50  in Allied Gaming Entertainment on September 3, 2024 and sell it today you would lose (1.48) from holding Allied Gaming Entertainment or give up 98.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	83.03%
Values	Daily Returns

Allied Gaming Entertainment  vs.  Marcus

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.

Marcus

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Marcus are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Marcus unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allied Gaming and Marcus

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

The idea behind Allied Gaming Entertainment and Marcus 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.