Correlation Between Svenska Handelsbanken and G5 Entertainment
Can any of the company-specific risk be diversified away by investing in both Svenska Handelsbanken 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 Svenska Handelsbanken and G5 Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svenska Handelsbanken AB and G5 Entertainment publ, you can compare the effects of market volatilities on Svenska Handelsbanken 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 Svenska Handelsbanken with a short position of G5 Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Handelsbanken and G5 Entertainment.
Diversification Opportunities for Svenska Handelsbanken and G5 Entertainment
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Svenska and G5EN is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Handelsbanken AB and G5 Entertainment publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G5 Entertainment publ and Svenska Handelsbanken 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 Svenska Handelsbanken AB 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 publ has no effect on the direction of Svenska Handelsbanken i.e., Svenska Handelsbanken and G5 Entertainment go up and down completely randomly.
Pair Corralation between Svenska Handelsbanken and G5 Entertainment
Assuming the 90 days trading horizon Svenska Handelsbanken is expected to generate 7.4 times less return on investment than G5 Entertainment. But when comparing it to its historical volatility, Svenska Handelsbanken AB is 3.03 times less risky than G5 Entertainment. It trades about 0.06 of its potential returns per unit of risk. G5 Entertainment publ is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 9,330 in G5 Entertainment publ on September 2, 2024 and sell it today you would earn a total of 750.00 from holding G5 Entertainment publ or generate 8.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Handelsbanken AB vs. G5 Entertainment publ
Performance |
| Timeline |
| Svenska Handelsbanken |
| G5 Entertainment publ |
Svenska Handelsbanken and G5 Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Handelsbanken and G5 Entertainment
The main advantage of trading using opposite Svenska Handelsbanken and G5 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Handelsbanken 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.| Svenska Handelsbanken vs. Swedbank AB | Svenska Handelsbanken vs. Nordea Bank Abp | Svenska Handelsbanken vs. Tele2 AB | Svenska Handelsbanken vs. Telia Company AB |
| G5 Entertainment vs. Tele2 AB | G5 Entertainment vs. Swedbank AB | G5 Entertainment vs. Svenska Handelsbanken AB | G5 Entertainment vs. Nordea Bank Abp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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