Correlation Between G5 Entertainment and Lyko Group
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Lyko Group 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 Lyko Group 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 Lyko Group A, you can compare the effects of market volatilities on G5 Entertainment and Lyko Group 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 Lyko Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Lyko Group.
Diversification Opportunities for G5 Entertainment and Lyko Group
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between G5EN and Lyko is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment publ and Lyko Group A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyko Group A 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 Lyko Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyko Group A has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Lyko Group go up and down completely randomly.
Pair Corralation between G5 Entertainment and Lyko Group
Assuming the 90 days trading horizon G5 Entertainment publ is expected to generate 0.63 times more return on investment than Lyko Group. However, G5 Entertainment publ is 1.58 times less risky than Lyko Group. It trades about 0.1 of its potential returns per unit of risk. Lyko Group A is currently generating about -0.2 per unit of risk. If you would invest 9,050 in G5 Entertainment publ on August 25, 2024 and sell it today you would earn a total of 770.00 from holding G5 Entertainment publ or generate 8.51% 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. Lyko Group A
Performance |
| Timeline |
| G5 Entertainment publ |
| Lyko Group A |
G5 Entertainment and Lyko Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and Lyko Group
The main advantage of trading using opposite G5 Entertainment and Lyko Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Lyko Group 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 Lyko Group will offset losses from the drop in Lyko Group's long position.| G5 Entertainment vs. Alfa Laval AB | G5 Entertainment vs. Anoto Group AB | G5 Entertainment vs. Active Biotech AB | G5 Entertainment vs. BioInvent International AB |
| Lyko Group vs. Boozt AB | Lyko Group vs. G5 Entertainment publ | Lyko Group vs. Stillfront Group AB | Lyko Group vs. Storytel 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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