Correlation Between G5 Entertainment and United States
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and United States 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 United States 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 United States Steel, you can compare the effects of market volatilities on G5 Entertainment and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and United States.
Diversification Opportunities for G5 Entertainment and United States
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 0QUS and United is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and United States go up and down completely randomly.
Pair Corralation between G5 Entertainment and United States
Assuming the 90 days trading horizon G5 Entertainment AB is expected to under-perform the United States. But the stock apears to be less risky and, when comparing its historical volatility, G5 Entertainment AB is 1.39 times less risky than United States. The stock trades about -0.02 of its potential returns per unit of risk. The United States Steel is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,528 in United States Steel on November 1, 2024 and sell it today you would lose (862.00) from holding United States Steel or give up 19.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
G5 Entertainment AB vs. United States Steel
Performance |
| Timeline |
| G5 Entertainment |
| United States Steel |
G5 Entertainment and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and United States
The main advantage of trading using opposite G5 Entertainment and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| G5 Entertainment vs. Automatic Data Processing | G5 Entertainment vs. GlobalData PLC | G5 Entertainment vs. Telecom Italia SpA | G5 Entertainment vs. Charter Communications Cl |
| United States vs. Scandic Hotels Group | United States vs. Host Hotels Resorts | United States vs. Pressure Technologies Plc | United States vs. Take Two Interactive Software |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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