Correlation Between Salesforce and GungHo Online
Can any of the company-specific risk be diversified away by investing in both Salesforce 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 Salesforce and GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and GungHo Online Entertainment, you can compare the effects of market volatilities on Salesforce 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 Salesforce with a short position of GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and GungHo Online.
Diversification Opportunities for Salesforce and GungHo Online
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and GungHo is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce 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 Salesforce 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 Salesforce 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 Salesforce i.e., Salesforce and GungHo Online go up and down completely randomly.
Pair Corralation between Salesforce and GungHo Online
Assuming the 90 days trading horizon Salesforce is expected to under-perform the GungHo Online. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 1.16 times less risky than GungHo Online. The stock trades about -0.03 of its potential returns per unit of risk. The GungHo Online Entertainment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,820 in GungHo Online Entertainment on October 23, 2024 and sell it today you would earn a total of 80.00 from holding GungHo Online Entertainment or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. GungHo Online Entertainment
Performance |
| Timeline |
| Salesforce |
| GungHo Online Entert |
Salesforce and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and GungHo Online
The main advantage of trading using opposite Salesforce and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce 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.| Salesforce vs. Nippon Light Metal | Salesforce vs. Fortescue Metals Group | Salesforce vs. Forsys Metals Corp | Salesforce vs. Cal Maine Foods |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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