Correlation Between G5 Entertainment and Herald Investment
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Herald 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 Herald 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 Herald Investment Trust, you can compare the effects of market volatilities on G5 Entertainment and Herald 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 Herald Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Herald Investment.
Diversification Opportunities for G5 Entertainment and Herald Investment
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 0QUS and Herald is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB and Herald Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herald Investment Trust 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 Herald Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herald Investment Trust has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Herald Investment go up and down completely randomly.
Pair Corralation between G5 Entertainment and Herald Investment
Assuming the 90 days trading horizon G5 Entertainment AB is expected to generate 1.6 times more return on investment than Herald Investment. However, G5 Entertainment is 1.6 times more volatile than Herald Investment Trust. It trades about 0.23 of its potential returns per unit of risk. Herald Investment Trust is currently generating about 0.03 per unit of risk. If you would invest 9,900 in G5 Entertainment AB on October 26, 2024 and sell it today you would earn a total of 2,020 from holding G5 Entertainment AB or generate 20.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
G5 Entertainment AB vs. Herald Investment Trust
Performance |
| Timeline |
| G5 Entertainment |
| Herald Investment Trust |
G5 Entertainment and Herald Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and Herald Investment
The main advantage of trading using opposite G5 Entertainment and Herald Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Herald 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 Herald Investment will offset losses from the drop in Herald Investment's long position.| G5 Entertainment vs. Empire Metals Limited | G5 Entertainment vs. Jupiter Fund Management | G5 Entertainment vs. Waste Management | G5 Entertainment vs. Dentsply Sirona |
| Herald Investment vs. SupplyMe Capital PLC | Herald Investment vs. Premier African Minerals | Herald Investment vs. SANTANDER UK 8 | Herald Investment vs. Tower Resources plc |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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