Correlation Between G5 Entertainment and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and PPHE Hotel 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 PPHE Hotel 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 PPHE Hotel Group, you can compare the effects of market volatilities on G5 Entertainment and PPHE Hotel 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 PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and PPHE Hotel.
Diversification Opportunities for G5 Entertainment and PPHE Hotel
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0QUS and PPHE is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB and PPHE Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE Hotel Group 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 PPHE Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE Hotel Group has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and PPHE Hotel go up and down completely randomly.
Pair Corralation between G5 Entertainment and PPHE Hotel
Assuming the 90 days trading horizon G5 Entertainment AB is expected to generate 1.64 times more return on investment than PPHE Hotel. However, G5 Entertainment is 1.64 times more volatile than PPHE Hotel Group. It trades about 0.17 of its potential returns per unit of risk. PPHE Hotel Group is currently generating about 0.09 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 840.00 from holding G5 Entertainment AB or generate 7.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G5 Entertainment AB vs. PPHE Hotel Group
Performance |
| Timeline |
| G5 Entertainment |
| PPHE Hotel Group |
G5 Entertainment and PPHE Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and PPHE Hotel
The main advantage of trading using opposite G5 Entertainment and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, PPHE Hotel 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 PPHE Hotel will offset losses from the drop in PPHE Hotel's 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 |
| PPHE Hotel vs. Bell Food Group | PPHE Hotel vs. Axfood AB | PPHE Hotel vs. Chrysalis Investments | PPHE Hotel vs. Zurich Insurance 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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