Correlation Between G5 Entertainment and Edinburgh Investment
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Edinburgh Investment 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 Edinburgh Investment 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 Edinburgh Investment Trust, you can compare the effects of market volatilities on G5 Entertainment and Edinburgh Investment 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 Edinburgh Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Edinburgh Investment.
Diversification Opportunities for G5 Entertainment and Edinburgh Investment
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0QUS and Edinburgh is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB and Edinburgh Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edinburgh Investment 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 Edinburgh Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edinburgh Investment has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Edinburgh Investment go up and down completely randomly.
Pair Corralation between G5 Entertainment and Edinburgh Investment
Assuming the 90 days trading horizon G5 Entertainment AB is expected to generate 3.0 times more return on investment than Edinburgh Investment. However, G5 Entertainment is 3.0 times more volatile than Edinburgh Investment Trust. It trades about 0.19 of its potential returns per unit of risk. Edinburgh Investment Trust is currently generating about 0.13 per unit of risk. If you would invest 10,260 in G5 Entertainment AB on November 7, 2024 and sell it today you would earn a total of 2,680 from holding G5 Entertainment AB or generate 26.12% 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. Edinburgh Investment Trust
Performance |
| Timeline |
| G5 Entertainment |
| Edinburgh Investment |
G5 Entertainment and Edinburgh Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and Edinburgh Investment
The main advantage of trading using opposite G5 Entertainment and Edinburgh Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Edinburgh Investment 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 Edinburgh Investment will offset losses from the drop in Edinburgh Investment's long position.| G5 Entertainment vs. Compagnie Plastic Omnium | G5 Entertainment vs. Hilton Food Group | G5 Entertainment vs. Grieg Seafood | G5 Entertainment vs. Dairy Farm International |
| Edinburgh Investment vs. Cairo Communication SpA | Edinburgh Investment vs. Zegona Communications Plc | Edinburgh Investment vs. Bigblu Broadband PLC | Edinburgh Investment vs. McEwen 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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