Correlation Between G5 Entertainment and Gapwaves
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Gapwaves 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 Gapwaves 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 Gapwaves AB Series, you can compare the effects of market volatilities on G5 Entertainment and Gapwaves 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 Gapwaves. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Gapwaves.
Diversification Opportunities for G5 Entertainment and Gapwaves
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between G5EN and Gapwaves is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment publ and Gapwaves AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gapwaves AB Series 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 Gapwaves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gapwaves AB Series has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Gapwaves go up and down completely randomly.
Pair Corralation between G5 Entertainment and Gapwaves
Assuming the 90 days trading horizon G5 Entertainment publ is expected to generate 0.35 times more return on investment than Gapwaves. However, G5 Entertainment publ is 2.84 times less risky than Gapwaves. It trades about 0.3 of its potential returns per unit of risk. Gapwaves AB Series is currently generating about 0.02 per unit of risk. If you would invest 10,580 in G5 Entertainment publ on October 7, 2024 and sell it today you would earn a total of 1,160 from holding G5 Entertainment publ or generate 10.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G5 Entertainment publ vs. Gapwaves AB Series
Performance |
| Timeline |
| G5 Entertainment publ |
| Gapwaves AB Series |
G5 Entertainment and Gapwaves Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and Gapwaves
The main advantage of trading using opposite G5 Entertainment and Gapwaves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Gapwaves 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 Gapwaves will offset losses from the drop in Gapwaves' 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 |
| Gapwaves vs. Sivers IMA Holding | Gapwaves vs. SaltX Technology Holding | Gapwaves vs. Acconeer AB | Gapwaves vs. Fingerprint Cards 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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