Correlation Between G5 Entertainment and Ross Stores
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on G5 Entertainment and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Ross Stores.
Diversification Opportunities for G5 Entertainment and Ross Stores
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0QUS and Ross is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Ross Stores go up and down completely randomly.
Pair Corralation between G5 Entertainment and Ross Stores
Assuming the 90 days trading horizon G5 Entertainment AB is expected to generate 1.64 times more return on investment than Ross Stores. However, G5 Entertainment is 1.64 times more volatile than Ross Stores. It trades about 0.31 of its potential returns per unit of risk. Ross Stores is currently generating about -0.12 per unit of risk. If you would invest 10,540 in G5 Entertainment AB on October 10, 2024 and sell it today you would earn a total of 1,440 from holding G5 Entertainment AB or generate 13.66% 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. Ross Stores
Performance |
| Timeline |
| G5 Entertainment |
| Ross Stores |
G5 Entertainment and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and Ross Stores
The main advantage of trading using opposite G5 Entertainment and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| G5 Entertainment vs. GreenX Metals | G5 Entertainment vs. Hochschild Mining plc | G5 Entertainment vs. Fortune Brands Home | G5 Entertainment vs. Ecclesiastical Insurance Office |
| Ross Stores vs. CAP LEASE AVIATION | Ross Stores vs. Scandinavian Tobacco Group | Ross Stores vs. Air Products Chemicals | Ross Stores vs. Auto Trader Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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