Correlation Between REGAL ASIAN and GungHo Online
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and GungHo Online 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 REGAL ASIAN and GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL ASIAN INVESTMENTS and GungHo Online Entertainment, you can compare the effects of market volatilities on REGAL ASIAN and GungHo Online 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 REGAL ASIAN with a short position of GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and GungHo Online.
Diversification Opportunities for REGAL ASIAN and GungHo Online
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between REGAL and GungHo is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and GungHo Online Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GungHo Online Entert and REGAL ASIAN 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 REGAL ASIAN INVESTMENTS are associated (or correlated) with GungHo Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GungHo Online Entert has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and GungHo Online go up and down completely randomly.
Pair Corralation between REGAL ASIAN and GungHo Online
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to generate 0.59 times more return on investment than GungHo Online. However, REGAL ASIAN INVESTMENTS is 1.68 times less risky than GungHo Online. It trades about 0.08 of its potential returns per unit of risk. GungHo Online Entertainment is currently generating about -0.11 per unit of risk. If you would invest 129.00 in REGAL ASIAN INVESTMENTS on August 27, 2024 and sell it today you would earn a total of 3.00 from holding REGAL ASIAN INVESTMENTS or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. GungHo Online Entertainment
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| GungHo Online Entert |
REGAL ASIAN and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and GungHo Online
The main advantage of trading using opposite REGAL ASIAN and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, GungHo Online 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 GungHo Online will offset losses from the drop in GungHo Online's long position.| REGAL ASIAN vs. Choice Hotels International | REGAL ASIAN vs. Meli Hotels International | REGAL ASIAN vs. InterContinental Hotels Group | REGAL ASIAN vs. METHODE ELECTRONICS |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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