Correlation Between G5 Entertainment and Avensia Publ

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

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

Diversification Opportunities for G5 Entertainment and Avensia Publ

-0.81

Correlation Coefficient

G5 Entertainment  Avensia Publ

Pay attention - limited upside

The 3 months correlation between G5EN and Avensia is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment publ and Avensia publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avensia publ AB 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 publ are associated (or correlated) with Avensia Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avensia publ AB has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Avensia Publ go up and down completely randomly.

Pair Corralation between G5 Entertainment and Avensia Publ

Assuming the 90 days trading horizon G5 Entertainment publ is expected to generate 0.96 times more return on investment than Avensia Publ. However, G5 Entertainment publ is 1.04 times less risky than Avensia Publ. It trades about 0.1 of its potential returns per unit of risk. Avensia publ AB is currently generating about -0.05 per unit of risk. If you would invest  9,160  in G5 Entertainment publ on September 5, 2024 and sell it today you would earn a total of  1,080  from holding G5 Entertainment publ or generate 11.79% return on investment over 90 days.

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

G5 Entertainment publ  vs.  Avensia publ AB

G5 Entertainment publ

Risk-Adjusted Performance

7 of 100

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 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Avensia publ AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avensia publ AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with G5 Entertainment and Avensia Publ

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

The idea behind G5 Entertainment publ and Avensia publ 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.