Correlation Between G5 Entertainment and Evolution

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

Diversification Opportunities for G5 Entertainment and Evolution

0.1

Correlation Coefficient

G5 Entertainment  Evolution

Average diversification

The 3 months correlation between G5EN and Evolution is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment publ and Evolution AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution 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 Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution AB has no effect on the direction of G5 Entertainment i.e., G5 Entertainment and Evolution go up and down completely randomly.

Pair Corralation between G5 Entertainment and Evolution

Assuming the 90 days trading horizon G5 Entertainment publ is expected to under-perform the Evolution. But the stock apears to be less risky and, when comparing its historical volatility, G5 Entertainment publ is 1.03 times less risky than Evolution. The stock trades about -0.01 of its potential returns per unit of risk. The Evolution AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  78,617  in Evolution AB on April 25, 2025 and sell it today you would earn a total of  6,083  from holding Evolution AB or generate 7.74% return on investment over 90 days.

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

G5 Entertainment publ  vs.  Evolution AB

G5 Entertainment publ

Risk-Adjusted Performance

Weak

Over the last 90 days G5 Entertainment publ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, G5 Entertainment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Evolution AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Evolution may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with G5 Entertainment and Evolution

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

The idea behind G5 Entertainment publ and Evolution 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.