Correlation Between REMEDY ENTERTAINMENT and GungHo Online
Can any of the company-specific risk be diversified away by investing in both REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT and GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REMEDY ENTERTAINMENT OYJ and GungHo Online Entertainment, you can compare the effects of market volatilities on REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT with a short position of GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of REMEDY ENTERTAINMENT and GungHo Online.
Diversification Opportunities for REMEDY ENTERTAINMENT and GungHo Online
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between REMEDY and GungHo is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding REMEDY ENTERTAINMENT OYJ 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 REMEDY 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 REMEDY ENTERTAINMENT OYJ 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 REMEDY ENTERTAINMENT i.e., REMEDY ENTERTAINMENT and GungHo Online go up and down completely randomly.
Pair Corralation between REMEDY ENTERTAINMENT and GungHo Online
Assuming the 90 days horizon REMEDY ENTERTAINMENT OYJ is expected to under-perform the GungHo Online. In addition to that, REMEDY ENTERTAINMENT is 1.18 times more volatile than GungHo Online Entertainment. It trades about -0.02 of its total potential returns per unit of risk. GungHo Online Entertainment is currently generating about 0.03 per unit of volatility. If you would invest 1,490 in GungHo Online Entertainment on October 28, 2024 and sell it today you would earn a total of 400.00 from holding GungHo Online Entertainment or generate 26.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REMEDY ENTERTAINMENT OYJ vs. GungHo Online Entertainment
Performance |
| Timeline |
| REMEDY ENTERTAINMENT OYJ |
| GungHo Online Entert |
REMEDY ENTERTAINMENT and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REMEDY ENTERTAINMENT and GungHo Online
The main advantage of trading using opposite REMEDY ENTERTAINMENT and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REMEDY ENTERTAINMENT 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.| REMEDY ENTERTAINMENT vs. REINET INVESTMENTS SCA | REMEDY ENTERTAINMENT vs. PLAYTIKA HOLDING DL 01 | REMEDY ENTERTAINMENT vs. SEI INVESTMENTS | REMEDY ENTERTAINMENT vs. Keck Seng Investments |
| GungHo Online vs. REVO INSURANCE SPA | GungHo Online vs. Insurance Australia Group | GungHo Online vs. Nordic Semiconductor ASA | GungHo Online vs. UNIQA INSURANCE GR |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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