Correlation Between GungHo Online and Major Drilling
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Major Drilling 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 Major Drilling 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 Major Drilling Group, you can compare the effects of market volatilities on GungHo Online and Major Drilling 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 Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Major Drilling.
Diversification Opportunities for GungHo Online and Major Drilling
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between GungHo and Major is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group 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 Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of GungHo Online i.e., GungHo Online and Major Drilling go up and down completely randomly.
Pair Corralation between GungHo Online and Major Drilling
Assuming the 90 days horizon GungHo Online Entertainment is expected to generate 1.03 times more return on investment than Major Drilling. However, GungHo Online is 1.03 times more volatile than Major Drilling Group. It trades about 0.06 of its potential returns per unit of risk. Major Drilling Group is currently generating about 0.04 per unit of risk. If you would invest 1,310 in GungHo Online Entertainment on September 14, 2024 and sell it today you would earn a total of 550.00 from holding GungHo Online Entertainment or generate 41.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GungHo Online Entertainment vs. Major Drilling Group
Performance |
| Timeline |
| GungHo Online Entert |
| Major Drilling Group |
GungHo Online and Major Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Major Drilling
The main advantage of trading using opposite GungHo Online and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling's long position.| GungHo Online vs. NEXON Co | GungHo Online vs. Take Two Interactive Software | GungHo Online vs. Superior Plus Corp | GungHo Online vs. SIVERS SEMICONDUCTORS AB |
| Major Drilling vs. Goosehead Insurance | Major Drilling vs. International Game Technology | Major Drilling vs. FUTURE GAMING GRP | Major Drilling vs. Zurich Insurance Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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