Correlation Between G5 Entertainment and Enea AB
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Enea AB 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 Enea AB 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 Enea AB, you can compare the effects of market volatilities on G5 Entertainment and Enea AB 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 Enea AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Enea AB.
Diversification Opportunities for G5 Entertainment and Enea AB
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between G5EN and Enea is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment publ and Enea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enea AB 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 Enea AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enea AB has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Enea AB go up and down completely randomly.
Pair Corralation between G5 Entertainment and Enea AB
Assuming the 90 days trading horizon G5 Entertainment is expected to generate 4.93 times less return on investment than Enea AB. But when comparing it to its historical volatility, G5 Entertainment publ is 1.02 times less risky than Enea AB. It trades about 0.03 of its potential returns per unit of risk. Enea AB is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,030 in Enea AB on October 27, 2024 and sell it today you would earn a total of 4,430 from holding Enea AB or generate 73.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G5 Entertainment publ vs. Enea AB
Performance |
| Timeline |
| G5 Entertainment publ |
| Enea AB |
G5 Entertainment and Enea AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and Enea AB
The main advantage of trading using opposite G5 Entertainment and Enea AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Enea AB 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 Enea AB will offset losses from the drop in Enea AB's long position.| G5 Entertainment vs. Stillfront Group AB | G5 Entertainment vs. Paradox Interactive AB | G5 Entertainment vs. Catena Media plc | G5 Entertainment vs. Betsson AB |
| Enea AB vs. Know IT AB | Enea AB vs. Proact IT Group | Enea AB vs. Hexatronic Group AB | Enea AB vs. Inwido AB |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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