Correlation Between Futura Medical and G5 Entertainment

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

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

Diversification Opportunities for Futura Medical and G5 Entertainment

-0.7

Correlation Coefficient

Futura Medical  G5 Entertainment

Excellent diversification

The 3 months correlation between Futura and 0QUS is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Futura Medical and G5 Entertainment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G5 Entertainment and Futura Medical 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 Futura Medical 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 Futura Medical i.e., Futura Medical and G5 Entertainment go up and down completely randomly.

Pair Corralation between Futura Medical and G5 Entertainment

Assuming the 90 days trading horizon Futura Medical is expected to under-perform the G5 Entertainment. In addition to that, Futura Medical is 2.63 times more volatile than G5 Entertainment AB. It trades about -0.21 of its total potential returns per unit of risk. G5 Entertainment AB is currently generating about 0.1 per unit of volatility. If you would invest  10,940  in G5 Entertainment AB on December 30, 2024 and sell it today you would earn a total of  1,660  from holding G5 Entertainment AB or generate 15.17% return on investment over 90 days.

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

Futura Medical  vs.  G5 Entertainment AB

Futura Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Futura Medical 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

G5 Entertainment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in G5 Entertainment AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, G5 Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Futura Medical and G5 Entertainment

The main advantage of trading using opposite Futura Medical and G5 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Futura Medical 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 Futura Medical and G5 Entertainment AB 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.