Correlation Between Impax Environmental and G5 Entertainment
Can any of the company-specific risk be diversified away by investing in both Impax Environmental and G5 Entertainment 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 Impax Environmental and G5 Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Environmental Markets and G5 Entertainment AB, you can compare the effects of market volatilities on Impax Environmental and G5 Entertainment 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 Impax Environmental with a short position of G5 Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and G5 Entertainment.
Diversification Opportunities for Impax Environmental and G5 Entertainment
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Impax and 0QUS is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets and G5 Entertainment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G5 Entertainment and Impax Environmental 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 Impax Environmental Markets are associated (or correlated) with G5 Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G5 Entertainment has no effect on the direction of Impax Environmental i.e., Impax Environmental and G5 Entertainment go up and down completely randomly.
Pair Corralation between Impax Environmental and G5 Entertainment
Assuming the 90 days trading horizon Impax Environmental is expected to generate 5.86 times less return on investment than G5 Entertainment. But when comparing it to its historical volatility, Impax Environmental Markets is 1.98 times less risky than G5 Entertainment. It trades about 0.08 of its potential returns per unit of risk. G5 Entertainment AB is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 11,800 in G5 Entertainment AB on November 7, 2024 and sell it today you would earn a total of 1,200 from holding G5 Entertainment AB or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Impax Environmental Markets vs. G5 Entertainment AB
Performance |
| Timeline |
| Impax Environmental |
| G5 Entertainment |
Impax Environmental and G5 Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Environmental and G5 Entertainment
The main advantage of trading using opposite Impax Environmental and G5 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental position performs unexpectedly, G5 Entertainment 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 G5 Entertainment will offset losses from the drop in G5 Entertainment's long position.| Impax Environmental vs. Diversified Energy | Impax Environmental vs. Cellnex Telecom SA | Impax Environmental vs. Flow Traders NV | Impax Environmental vs. JPMorgan Japanese Investment |
| G5 Entertainment vs. Qurate Retail Series | G5 Entertainment vs. Nordic Semiconductor ASA | G5 Entertainment vs. Spirent Communications plc | G5 Entertainment vs. United Internet AG |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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