Correlation Between Enea AB and G5 Entertainment

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

By analyzing existing cross correlation between Enea AB and G5 Entertainment publ, you can compare the effects of market volatilities on Enea AB 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 Enea AB with a short position of G5 Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enea AB and G5 Entertainment.

Diversification Opportunities for Enea AB and G5 Entertainment

-0.33

Correlation Coefficient

Enea AB  G5 Entertainment

Very good diversification

The 3 months correlation between Enea and G5EN is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Enea 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 Enea AB 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 Enea 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 Enea AB i.e., Enea AB and G5 Entertainment go up and down completely randomly.

Pair Corralation between Enea AB and G5 Entertainment

Assuming the 90 days trading horizon Enea AB is expected to under-perform the G5 Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Enea AB is 1.36 times less risky than G5 Entertainment. The stock trades about -0.13 of its potential returns per unit of risk. The G5 Entertainment publ is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  11,000  in G5 Entertainment publ on December 29, 2024 and sell it today you would earn a total of  1,520  from holding G5 Entertainment publ or generate 13.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Enea AB  vs.  G5 Entertainment publ

Enea AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enea AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

G5 Entertainment publ

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in G5 Entertainment publ are ranked lower than 7 (%) 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.

Pair Trading with Enea AB and G5 Entertainment

The main advantage of trading using opposite Enea AB and G5 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enea AB 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.

The idea behind Enea AB and G5 Entertainment publ 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.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.