Correlation Between Canadian Utilities and GungHo Online
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities 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 Canadian Utilities and GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Limited and GungHo Online Entertainment, you can compare the effects of market volatilities on Canadian Utilities 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 Canadian Utilities with a short position of GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and GungHo Online.
Diversification Opportunities for Canadian Utilities and GungHo Online
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and GungHo is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited 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 Canadian Utilities 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 Canadian Utilities Limited 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 Canadian Utilities i.e., Canadian Utilities and GungHo Online go up and down completely randomly.
Pair Corralation between Canadian Utilities and GungHo Online
Assuming the 90 days horizon Canadian Utilities is expected to generate 3.64 times less return on investment than GungHo Online. But when comparing it to its historical volatility, Canadian Utilities Limited is 1.76 times less risky than GungHo Online. It trades about 0.02 of its potential returns per unit of risk. GungHo Online Entertainment is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,460 in GungHo Online Entertainment on September 3, 2024 and sell it today you would earn a total of 380.00 from holding GungHo Online Entertainment or generate 26.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Utilities Limited vs. GungHo Online Entertainment
Performance |
| Timeline |
| Canadian Utilities |
| GungHo Online Entert |
Canadian Utilities and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and GungHo Online
The main advantage of trading using opposite Canadian Utilities and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities 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.| Canadian Utilities vs. MAVEN WIRELESS SWEDEN | Canadian Utilities vs. Citic Telecom International | Canadian Utilities vs. Tower One Wireless | Canadian Utilities vs. Chunghwa Telecom Co |
| GungHo Online vs. JIAHUA STORES | GungHo Online vs. FUYO GENERAL LEASE | GungHo Online vs. THORNEY TECHS LTD | GungHo Online vs. QURATE RETAIL INC |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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