Correlation Between Align Technology and GungHo Online
Can any of the company-specific risk be diversified away by investing in both Align Technology 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 Align Technology and GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and GungHo Online Entertainment, you can compare the effects of market volatilities on Align Technology 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 Align Technology with a short position of GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and GungHo Online.
Diversification Opportunities for Align Technology and GungHo Online
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Align and GungHo is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology 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 Align Technology 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 Align Technology 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 Align Technology i.e., Align Technology and GungHo Online go up and down completely randomly.
Pair Corralation between Align Technology and GungHo Online
Assuming the 90 days horizon Align Technology is expected to under-perform the GungHo Online. In addition to that, Align Technology is 1.27 times more volatile than GungHo Online Entertainment. It trades about -0.01 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Align Technology vs. GungHo Online Entertainment
Performance |
| Timeline |
| Align Technology |
| GungHo Online Entert |
Align Technology and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and GungHo Online
The main advantage of trading using opposite Align Technology and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology 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.| Align Technology vs. Abbott Laboratories | Align Technology vs. Abbott Laboratories | Align Technology vs. Medtronic PLC | Align Technology vs. Stryker |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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