Correlation Between GungHo Online and Franco Nevada
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Franco Nevada 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 GungHo Online and Franco Nevada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GungHo Online Entertainment and Franco Nevada, you can compare the effects of market volatilities on GungHo Online and Franco Nevada 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 GungHo Online with a short position of Franco Nevada. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Franco Nevada.
Diversification Opportunities for GungHo Online and Franco Nevada
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GungHo and Franco is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Franco Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franco Nevada and GungHo Online 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 GungHo Online Entertainment are associated (or correlated) with Franco Nevada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franco Nevada has no effect on the direction of GungHo Online i.e., GungHo Online and Franco Nevada go up and down completely randomly.
Pair Corralation between GungHo Online and Franco Nevada
Assuming the 90 days horizon GungHo Online Entertainment is expected to generate 1.23 times more return on investment than Franco Nevada. However, GungHo Online is 1.23 times more volatile than Franco Nevada. It trades about 0.03 of its potential returns per unit of risk. Franco Nevada is currently generating about 0.0 per unit of risk. 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GungHo Online Entertainment vs. Franco Nevada
Performance |
| Timeline |
| GungHo Online Entert |
| Franco Nevada |
GungHo Online and Franco Nevada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Franco Nevada
The main advantage of trading using opposite GungHo Online and Franco Nevada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Franco Nevada 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 Franco Nevada will offset losses from the drop in Franco Nevada's long position.| GungHo Online vs. JIAHUA STORES | GungHo Online vs. FUYO GENERAL LEASE | GungHo Online vs. THORNEY TECHS LTD | GungHo Online vs. QURATE RETAIL INC |
| Franco Nevada vs. ZIJIN MINH UNSPADR20 | Franco Nevada vs. Barrick Gold | Franco Nevada vs. Superior Plus Corp | Franco Nevada vs. NMI Holdings |
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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