Correlation Between G5 Entertainment and Liberty Media
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Liberty Media 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 Liberty Media 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 Liberty Media Corp, you can compare the effects of market volatilities on G5 Entertainment and Liberty Media 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 Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Liberty Media.
Diversification Opportunities for G5 Entertainment and Liberty Media
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0QUS and Liberty is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB and Liberty Media Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media Corp 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 Liberty Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Media Corp has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Liberty Media go up and down completely randomly.
Pair Corralation between G5 Entertainment and Liberty Media
Assuming the 90 days trading horizon G5 Entertainment AB is expected to generate 1.56 times more return on investment than Liberty Media. However, G5 Entertainment is 1.56 times more volatile than Liberty Media Corp. It trades about 0.12 of its potential returns per unit of risk. Liberty Media Corp is currently generating about 0.18 per unit of risk. If you would invest 9,060 in G5 Entertainment AB on August 29, 2024 and sell it today you would earn a total of 690.00 from holding G5 Entertainment AB or generate 7.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G5 Entertainment AB vs. Liberty Media Corp
Performance |
| Timeline |
| G5 Entertainment |
| Liberty Media Corp |
G5 Entertainment and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and Liberty Media
The main advantage of trading using opposite G5 Entertainment and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Liberty Media 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 Liberty Media will offset losses from the drop in Liberty Media's long position.| G5 Entertainment vs. Lendinvest PLC | G5 Entertainment vs. Neometals | G5 Entertainment vs. Coor Service Management | G5 Entertainment vs. Albion Technology General |
| Liberty Media vs. Lendinvest PLC | Liberty Media vs. Neometals | Liberty Media vs. Coor Service Management | Liberty Media vs. Albion Technology General |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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