Correlation Between 5Th Planet and Napatech
Can any of the company-specific risk be diversified away by investing in both 5Th Planet and Napatech 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 5Th Planet and Napatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 5Th Planet Games and Napatech AS, you can compare the effects of market volatilities on 5Th Planet and Napatech 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 5Th Planet with a short position of Napatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of 5Th Planet and Napatech.
Diversification Opportunities for 5Th Planet and Napatech
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 5Th and Napatech is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding 5Th Planet Games and Napatech AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Napatech AS and 5Th Planet 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 5Th Planet Games are associated (or correlated) with Napatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Napatech AS has no effect on the direction of 5Th Planet i.e., 5Th Planet and Napatech go up and down completely randomly.
Pair Corralation between 5Th Planet and Napatech
Assuming the 90 days trading horizon 5Th Planet Games is expected to generate 1.89 times more return on investment than Napatech. However, 5Th Planet is 1.89 times more volatile than Napatech AS. It trades about 0.12 of its potential returns per unit of risk. Napatech AS is currently generating about -0.31 per unit of risk. If you would invest 108.00 in 5Th Planet Games on September 1, 2024 and sell it today you would earn a total of 9.00 from holding 5Th Planet Games or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
5Th Planet Games vs. Napatech AS
Performance |
| Timeline |
| 5Th Planet Games |
| Napatech AS |
5Th Planet and Napatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 5Th Planet and Napatech
The main advantage of trading using opposite 5Th Planet and Napatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 5Th Planet position performs unexpectedly, Napatech 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 Napatech will offset losses from the drop in Napatech's long position.| 5Th Planet vs. Solstad Offsho | 5Th Planet vs. Saga Pure ASA | 5Th Planet vs. REC Silicon ASA | 5Th Planet vs. Kongsberg Automotive Holding |
| Napatech vs. Idex ASA | Napatech vs. Next Biometrics Group | Napatech vs. Polight ASA | Napatech vs. Kitron ASA |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| 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 Anywhere Track or share privately all of your investments from the convenience of any device | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |