Correlation Between G5 Entertainment and Swedencare Publ

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Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Swedencare Publ 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 Swedencare Publ 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 Swedencare publ AB, you can compare the effects of market volatilities on G5 Entertainment and Swedencare Publ 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 Swedencare Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Swedencare Publ.

Diversification Opportunities for G5 Entertainment and Swedencare Publ

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between G5EN and Swedencare is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment publ and Swedencare publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedencare publ 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 Swedencare Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedencare publ AB has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Swedencare Publ go up and down completely randomly.

Pair Corralation between G5 Entertainment and Swedencare Publ

Assuming the 90 days trading horizon G5 Entertainment publ is expected to generate 0.79 times more return on investment than Swedencare Publ. However, G5 Entertainment publ is 1.27 times less risky than Swedencare Publ. It trades about 0.3 of its potential returns per unit of risk. Swedencare publ AB is currently generating about -0.08 per unit of risk. If you would invest  10,740  in G5 Entertainment publ on October 23, 2024 and sell it today you would earn a total of  980.00  from holding G5 Entertainment publ or generate 9.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

G5 Entertainment publ  vs.  Swedencare publ AB

 Performance 
       Timeline  
G5 Entertainment publ 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in G5 Entertainment publ are ranked lower than 17 (%) 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.
Swedencare publ AB 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Swedencare publ AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Swedencare Publ sustained solid returns over the last few months and may actually be approaching a breakup point.

G5 Entertainment and Swedencare Publ Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with G5 Entertainment and Swedencare Publ

The main advantage of trading using opposite G5 Entertainment and Swedencare Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Swedencare Publ 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 Swedencare Publ will offset losses from the drop in Swedencare Publ's long position.
The idea behind G5 Entertainment publ and Swedencare publ AB 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.
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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