Correlation Between G5 Entertainment and Swedencare Publ
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
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between G5EN and Swedencare is 0.42. 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 2.6 times more return on investment than Swedencare Publ. However, G5 Entertainment is 2.6 times more volatile than Swedencare publ AB. It trades about 0.16 of its potential returns per unit of risk. Swedencare publ AB is currently generating about 0.11 per unit of risk. If you would invest 9,040 in G5 Entertainment publ on August 28, 2024 and sell it today you would earn a total of 830.00 from holding G5 Entertainment publ or generate 9.18% 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. Swedencare publ AB
Performance |
| Timeline |
| G5 Entertainment publ |
| Swedencare publ AB |
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.| G5 Entertainment vs. Stillfront Group AB | G5 Entertainment vs. Paradox Interactive AB | G5 Entertainment vs. Catena Media plc | G5 Entertainment vs. Betsson AB |
| Swedencare Publ vs. Enzymatica publ AB | Swedencare Publ vs. KABE Group AB | Swedencare Publ vs. IAR Systems Group | Swedencare Publ vs. Mekonomen 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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