Correlation Between G5 Entertainment and Golden Metal

Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Golden Metal 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 Golden Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G5 Entertainment AB and Golden Metal Resources, you can compare the effects of market volatilities on G5 Entertainment and Golden Metal 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 Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Golden Metal.

Diversification Opportunities for G5 Entertainment and Golden Metal

0.37

Correlation Coefficient

G5 Entertainment  Golden Metal

Weak diversification

The 3 months correlation between 0QUS and Golden is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources 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 AB are associated (or correlated) with Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Golden Metal go up and down completely randomly.

Pair Corralation between G5 Entertainment and Golden Metal

Assuming the 90 days trading horizon G5 Entertainment AB is expected to generate 1.44 times more return on investment than Golden Metal. However, G5 Entertainment is 1.44 times more volatile than Golden Metal Resources. It trades about 0.27 of its potential returns per unit of risk. Golden Metal Resources is currently generating about -0.22 per unit of risk. If you would invest  10,340  in G5 Entertainment AB on October 5, 2024 and sell it today you would earn a total of  1,200  from holding G5 Entertainment AB or generate 11.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

G5 Entertainment AB  vs.  Golden Metal Resources

G5 Entertainment

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in G5 Entertainment AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, G5 Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Golden Metal Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Metal Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Golden Metal is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with G5 Entertainment and Golden Metal

The main advantage of trading using opposite G5 Entertainment and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Golden Metal 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 Golden Metal will offset losses from the drop in Golden Metal's long position.

The idea behind G5 Entertainment AB and Golden Metal Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.