Correlation Between G5 Entertainment and Hershey
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Hershey 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 Hershey 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 Hershey Co, you can compare the effects of market volatilities on G5 Entertainment and Hershey 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 Hershey. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Hershey.
Diversification Opportunities for G5 Entertainment and Hershey
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 0QUS and Hershey is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB and Hershey Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hershey 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 Hershey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hershey has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Hershey go up and down completely randomly.
Pair Corralation between G5 Entertainment and Hershey
Assuming the 90 days trading horizon G5 Entertainment AB is expected to generate 1.45 times more return on investment than Hershey. However, G5 Entertainment is 1.45 times more volatile than Hershey Co. It trades about -0.02 of its potential returns per unit of risk. Hershey Co is currently generating about -0.04 per unit of risk. If you would invest 14,660 in G5 Entertainment AB on October 18, 2024 and sell it today you would lose (2,760) from holding G5 Entertainment AB or give up 18.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
G5 Entertainment AB vs. Hershey Co
Performance |
| Timeline |
| G5 Entertainment |
| Hershey |
G5 Entertainment and Hershey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and Hershey
The main advantage of trading using opposite G5 Entertainment and Hershey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Hershey 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 Hershey will offset losses from the drop in Hershey's long position.| G5 Entertainment vs. Trainline Plc | G5 Entertainment vs. Charter Communications Cl | G5 Entertainment vs. Roadside Real Estate | G5 Entertainment vs. Spirent Communications plc |
| Hershey vs. G5 Entertainment AB | Hershey vs. Ion Beam Applications | Hershey vs. Flutter Entertainment PLC | Hershey vs. Datalogic |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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