Correlation Between G5 Entertainment and Polygiene
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Polygiene 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 Polygiene 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 Polygiene AB, you can compare the effects of market volatilities on G5 Entertainment and Polygiene 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 Polygiene. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Polygiene.
Diversification Opportunities for G5 Entertainment and Polygiene
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between G5EN and Polygiene is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment publ and Polygiene AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polygiene 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 Polygiene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polygiene AB has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Polygiene go up and down completely randomly.
Pair Corralation between G5 Entertainment and Polygiene
Assuming the 90 days trading horizon G5 Entertainment is expected to generate 3.43 times less return on investment than Polygiene. But when comparing it to its historical volatility, G5 Entertainment publ is 1.83 times less risky than Polygiene. It trades about 0.05 of its potential returns per unit of risk. Polygiene AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 938.00 in Polygiene AB on November 3, 2024 and sell it today you would earn a total of 417.00 from holding Polygiene AB or generate 44.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
G5 Entertainment publ vs. Polygiene AB
Performance |
| Timeline |
| G5 Entertainment publ |
| Polygiene AB |
G5 Entertainment and Polygiene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and Polygiene
The main advantage of trading using opposite G5 Entertainment and Polygiene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Polygiene 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 Polygiene will offset losses from the drop in Polygiene'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 |
| Polygiene vs. G5 Entertainment publ | Polygiene vs. Nexam Chemical Holding | Polygiene vs. Swedencare publ AB | Polygiene vs. Genovis 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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