Correlation Between G5 Entertainment and Power Metal
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Power Metal 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 Power Metal 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 Power Metal Resources, you can compare the effects of market volatilities on G5 Entertainment and Power Metal 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 Power Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Power Metal.
Diversification Opportunities for G5 Entertainment and Power Metal
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 0QUS and Power is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB and Power Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Metal Resources 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 Power Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Metal Resources has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Power Metal go up and down completely randomly.
Pair Corralation between G5 Entertainment and Power Metal
Assuming the 90 days trading horizon G5 Entertainment is expected to generate 1.2 times less return on investment than Power Metal. But when comparing it to its historical volatility, G5 Entertainment AB is 1.54 times less risky than Power Metal. It trades about 0.18 of its potential returns per unit of risk. Power Metal Resources is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,300 in Power Metal Resources on September 2, 2024 and sell it today you would earn a total of 163.00 from holding Power Metal Resources or generate 12.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G5 Entertainment AB vs. Power Metal Resources
Performance |
| Timeline |
| G5 Entertainment |
| Power Metal Resources |
G5 Entertainment and Power Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and Power Metal
The main advantage of trading using opposite G5 Entertainment and Power Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Power Metal 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 Power Metal will offset losses from the drop in Power Metal's long position.| G5 Entertainment vs. Uniper SE | G5 Entertainment vs. Mulberry Group PLC | G5 Entertainment vs. London Security Plc | G5 Entertainment vs. Triad Group PLC |
| Power Metal vs. Givaudan SA | Power Metal vs. Antofagasta PLC | Power Metal vs. Centamin PLC | Power Metal vs. Atalaya 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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