Correlation Between G5 Entertainment and Upsales Technology
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Upsales Technology 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 Upsales Technology 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 Upsales Technology AB, you can compare the effects of market volatilities on G5 Entertainment and Upsales Technology 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 Upsales Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Upsales Technology.
Diversification Opportunities for G5 Entertainment and Upsales Technology
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between G5EN and Upsales is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment publ and Upsales Technology AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upsales Technology 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 Upsales Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upsales Technology has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Upsales Technology go up and down completely randomly.
Pair Corralation between G5 Entertainment and Upsales Technology
Assuming the 90 days trading horizon G5 Entertainment publ is expected to under-perform the Upsales Technology. But the stock apears to be less risky and, when comparing its historical volatility, G5 Entertainment publ is 1.62 times less risky than Upsales Technology. The stock trades about -0.06 of its potential returns per unit of risk. The Upsales Technology AB is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 5,247 in Upsales Technology AB on September 1, 2024 and sell it today you would lose (2,087) from holding Upsales Technology AB or give up 39.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G5 Entertainment publ vs. Upsales Technology AB
Performance |
| Timeline |
| G5 Entertainment publ |
| Upsales Technology |
G5 Entertainment and Upsales Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G5 Entertainment and Upsales Technology
The main advantage of trading using opposite G5 Entertainment and Upsales Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Upsales Technology 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 Upsales Technology will offset losses from the drop in Upsales Technology'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 |
| Upsales Technology vs. Lime Technologies AB | Upsales Technology vs. FormPipe Software AB | Upsales Technology vs. Surgical Science Sweden | Upsales Technology vs. Vitec Software Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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