Correlation Between China Datang and GungHo Online
Can any of the company-specific risk be diversified away by investing in both China Datang 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 China Datang and GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Datang and GungHo Online Entertainment, you can compare the effects of market volatilities on China Datang 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 China Datang with a short position of GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Datang and GungHo Online.
Diversification Opportunities for China Datang and GungHo Online
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and GungHo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding China Datang 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 China Datang 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 China Datang 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 China Datang i.e., China Datang and GungHo Online go up and down completely randomly.
Pair Corralation between China Datang and GungHo Online
Assuming the 90 days horizon China Datang is expected to generate 2.02 times more return on investment than GungHo Online. However, China Datang is 2.02 times more volatile than GungHo Online Entertainment. It trades about 0.04 of its potential returns per unit of risk. GungHo Online Entertainment is currently generating about 0.02 per unit of risk. If you would invest 15.00 in China Datang on December 1, 2024 and sell it today you would earn a total of 10.00 from holding China Datang or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Datang vs. GungHo Online Entertainment
Performance |
| Timeline |
| China Datang |
| GungHo Online Entert |
China Datang and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Datang and GungHo Online
The main advantage of trading using opposite China Datang and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Datang 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.| China Datang vs. Universal Display | China Datang vs. PACIFIC ONLINE | China Datang vs. InPlay Oil Corp | China Datang vs. COLUMBIA SPORTSWEAR |
| GungHo Online vs. Northern Data AG | GungHo Online vs. CHINA TELECOM H | GungHo Online vs. STORAGEVAULT CANADA INC | GungHo Online vs. Spirent Communications plc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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