Correlation Between G5 Entertainment and Swedencare Publ

Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Swedencare 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 Swedencare 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 Swedencare publ AB, you can compare the effects of market volatilities on G5 Entertainment and Swedencare 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 Swedencare Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Swedencare Publ.

Diversification Opportunities for G5 Entertainment and Swedencare Publ

-0.15

Correlation Coefficient

G5 Entertainment  Swedencare Publ

Good diversification

The 3 months correlation between G5EN and Swedencare is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment publ and Swedencare publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedencare 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 Swedencare Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedencare publ AB has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Swedencare Publ go up and down completely randomly.

Pair Corralation between G5 Entertainment and Swedencare Publ

Assuming the 90 days trading horizon G5 Entertainment publ is expected to generate 1.1 times more return on investment than Swedencare Publ. However, G5 Entertainment is 1.1 times more volatile than Swedencare publ AB. It trades about 0.1 of its potential returns per unit of risk. Swedencare publ AB is currently generating about -0.14 per unit of risk. If you would invest  10,900  in G5 Entertainment publ on December 26, 2024 and sell it today you would earn a total of  1,700  from holding G5 Entertainment publ or generate 15.6% return on investment over 90 days.

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

G5 Entertainment publ  vs.  Swedencare publ AB

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 8 (%) 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.

Swedencare publ AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Swedencare publ AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with G5 Entertainment and Swedencare Publ

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

The idea behind G5 Entertainment publ and Swedencare 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.