Correlation Between G5 Entertainment and Midsummer
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment and Midsummer 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 Midsummer 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 Midsummer AB, you can compare the effects of market volatilities on G5 Entertainment and Midsummer 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 Midsummer. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Midsummer.
Diversification Opportunities for G5 Entertainment and Midsummer
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between G5EN and Midsummer is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment publ and Midsummer AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midsummer 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 Midsummer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midsummer AB has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Midsummer go up and down completely randomly.
Pair Corralation between G5 Entertainment and Midsummer
Assuming the 90 days trading horizon G5 Entertainment is expected to generate 2.4 times less return on investment than Midsummer. But when comparing it to its historical volatility, G5 Entertainment publ is 2.76 times less risky than Midsummer. It trades about 0.19 of its potential returns per unit of risk. Midsummer AB is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 107.00 in Midsummer AB on September 15, 2024 and sell it today you would earn a total of 69.00 from holding Midsummer AB or generate 64.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.48% |
Values | Daily Returns |
G5 Entertainment publ vs. Midsummer AB
Performance |
Timeline |
G5 Entertainment publ |
Midsummer AB |
G5 Entertainment and Midsummer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with G5 Entertainment and Midsummer
The main advantage of trading using opposite G5 Entertainment and Midsummer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment position performs unexpectedly, Midsummer 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 Midsummer will offset losses from the drop in Midsummer's long position.G5 Entertainment vs. Stillfront Group AB | G5 Entertainment vs. Paradox Interactive AB | G5 Entertainment vs. Catena Media plc | G5 Entertainment vs. Betsson AB |
Midsummer vs. G5 Entertainment publ | Midsummer vs. Swedbank AB | Midsummer vs. Arctic Blue Beverages | Midsummer vs. TradeDoubler AB |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |