Correlation Between Litigation Capital and G5 Entertainment
Can any of the company-specific risk be diversified away by investing in both Litigation Capital 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 Litigation Capital and G5 Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litigation Capital Management and G5 Entertainment AB, you can compare the effects of market volatilities on Litigation Capital 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 Litigation Capital with a short position of G5 Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litigation Capital and G5 Entertainment.
Diversification Opportunities for Litigation Capital and G5 Entertainment
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Litigation and 0QUS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Litigation Capital Management and G5 Entertainment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G5 Entertainment and Litigation Capital 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 Litigation Capital Management 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 Litigation Capital i.e., Litigation Capital and G5 Entertainment go up and down completely randomly.
Pair Corralation between Litigation Capital and G5 Entertainment
Assuming the 90 days trading horizon Litigation Capital Management is expected to under-perform the G5 Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Litigation Capital Management is 1.31 times less risky than G5 Entertainment. The stock trades about -0.17 of its potential returns per unit of risk. The G5 Entertainment AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 10,840 in G5 Entertainment AB on September 12, 2024 and sell it today you would earn a total of 20.00 from holding G5 Entertainment AB or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Litigation Capital Management vs. G5 Entertainment AB
Performance |
| Timeline |
| Litigation Capital |
| G5 Entertainment |
Litigation Capital and G5 Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litigation Capital and G5 Entertainment
The main advantage of trading using opposite Litigation Capital and G5 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litigation Capital 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.| Litigation Capital vs. Samsung Electronics Co | Litigation Capital vs. Samsung Electronics Co | Litigation Capital vs. Hyundai Motor | Litigation Capital vs. Toyota Motor Corp |
| G5 Entertainment vs. Tatton Asset Management | G5 Entertainment vs. Melia Hotels | G5 Entertainment vs. Litigation Capital Management | G5 Entertainment vs. Host Hotels Resorts |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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