Correlation Between Exela Technologies and Esports Entertainment

Can any of the company-specific risk be diversified away by investing in both Exela Technologies 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 Exela Technologies and Esports Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exela Technologies Preferred and Esports Entertainment Group, you can compare the effects of market volatilities on Exela Technologies 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 Exela Technologies with a short position of Esports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exela Technologies and Esports Entertainment.

Diversification Opportunities for Exela Technologies and Esports Entertainment

-0.69

Correlation Coefficient

Exela Technologies  Esports Entertainment

Excellent diversification

The 3 months correlation between Exela and Esports is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Exela Technologies 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 Exela Technologies 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 Exela Technologies 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 Exela Technologies i.e., Exela Technologies and Esports Entertainment go up and down completely randomly.

Pair Corralation between Exela Technologies and Esports Entertainment

If you would invest  590.00  in Esports Entertainment Group on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Esports Entertainment Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.92%
Values	Daily Returns

Exela Technologies Preferred  vs.  Esports Entertainment Group

Exela Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exela Technologies Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Esports Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Esports Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, Esports Entertainment is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Exela Technologies and Esports Entertainment

The main advantage of trading using opposite Exela Technologies and Esports Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exela Technologies 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 Exela Technologies 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.