Correlation Between G5 Entertainment and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC, you can compare the effects of market volatilities on G5 Entertainment and XLMedia PLC 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 XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and XLMedia PLC.
Diversification Opportunities for G5 Entertainment and XLMedia PLC
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 0QUS and XLMedia is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC 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 XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and XLMedia PLC go up and down completely randomly.
Pair Corralation between G5 Entertainment and XLMedia PLC
Assuming the 90 days trading horizon G5 Entertainment AB is expected to generate 2.17 times more return on investment than XLMedia PLC. However, G5 Entertainment is 2.17 times more volatile than XLMedia PLC. It trades about 0.18 of its potential returns per unit of risk. XLMedia PLC is currently generating about 0.01 per unit of risk. If you would invest 9,090 in G5 Entertainment AB on September 1, 2024 and sell it today you would earn a total of 1,030 from holding G5 Entertainment AB or generate 11.33% 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. XLMedia PLC
Performance |
| Timeline |
| G5 Entertainment |
| XLMedia PLC |
G5 Entertainment and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and XLMedia PLC
The main advantage of trading using opposite G5 Entertainment and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| G5 Entertainment vs. Darden Restaurants | G5 Entertainment vs. Beowulf Mining | G5 Entertainment vs. SBM Offshore NV | G5 Entertainment vs. Finnair Oyj |
| XLMedia PLC vs. Uniper SE | XLMedia PLC vs. Mulberry Group PLC | XLMedia PLC vs. London Security Plc | XLMedia PLC vs. Triad Group 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |