Correlation Between G5 Entertainment and Beowulf Mining

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Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Beowulf Mining 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 Beowulf Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G5 Entertainment publ and Beowulf Mining PLC, you can compare the effects of market volatilities on G5 Entertainment and Beowulf Mining 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 Beowulf Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Beowulf Mining.

Diversification Opportunities for G5 Entertainment and Beowulf Mining

-0.81
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between G5EN and Beowulf is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment publ and Beowulf Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beowulf Mining 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 publ are associated (or correlated) with Beowulf Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beowulf Mining PLC has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Beowulf Mining go up and down completely randomly.

Pair Corralation between G5 Entertainment and Beowulf Mining

Assuming the 90 days trading horizon G5 Entertainment publ is expected to generate 0.39 times more return on investment than Beowulf Mining. However, G5 Entertainment publ is 2.56 times less risky than Beowulf Mining. It trades about 0.16 of its potential returns per unit of risk. Beowulf Mining PLC is currently generating about -0.35 per unit of risk. If you would invest  10,440  in G5 Entertainment publ on September 13, 2024 and sell it today you would earn a total of  560.00  from holding G5 Entertainment publ or generate 5.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

G5 Entertainment publ  vs.  Beowulf Mining PLC

 Performance 
       Timeline  
G5 Entertainment publ 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in G5 Entertainment publ are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, G5 Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.
Beowulf Mining PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Beowulf Mining PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

G5 Entertainment and Beowulf Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with G5 Entertainment and Beowulf Mining

The main advantage of trading using opposite G5 Entertainment and Beowulf Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Beowulf Mining 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 Beowulf Mining will offset losses from the drop in Beowulf Mining's long position.
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The idea behind G5 Entertainment publ and Beowulf Mining PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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