Correlation Between G5 Entertainment and DXC Technology
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and DXC Technology 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 G5 Entertainment and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G5 Entertainment AB and DXC Technology Co, you can compare the effects of market volatilities on G5 Entertainment and DXC Technology 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 G5 Entertainment with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and DXC Technology.
Diversification Opportunities for G5 Entertainment and DXC Technology
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0QUS and DXC is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB and DXC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and G5 Entertainment 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 G5 Entertainment AB are associated (or correlated) with DXC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DXC Technology has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and DXC Technology go up and down completely randomly.
Pair Corralation between G5 Entertainment and DXC Technology
Assuming the 90 days trading horizon G5 Entertainment AB is expected to generate 0.89 times more return on investment than DXC Technology. However, G5 Entertainment AB is 1.13 times less risky than DXC Technology. It trades about 0.15 of its potential returns per unit of risk. DXC Technology Co is currently generating about 0.11 per unit of risk. If you would invest 9,030 in G5 Entertainment AB on August 24, 2024 and sell it today you would earn a total of 840.00 from holding G5 Entertainment AB or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G5 Entertainment AB vs. DXC Technology Co
Performance |
| Timeline |
| G5 Entertainment |
| DXC Technology |
G5 Entertainment and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and DXC Technology
The main advantage of trading using opposite G5 Entertainment and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, DXC Technology 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 DXC Technology will offset losses from the drop in DXC Technology's long position.| G5 Entertainment vs. Quadrise Plc | G5 Entertainment vs. Intuitive Investments Group | G5 Entertainment vs. European Metals Holdings | G5 Entertainment vs. Athelney Trust plc |
| DXC Technology vs. International Biotechnology Trust | DXC Technology vs. MediaZest plc | DXC Technology vs. G5 Entertainment AB | DXC Technology vs. Blackrock World Mining |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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