Correlation Between GungHo Online and Fukuoka Financial
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Fukuoka Financial 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 Fukuoka Financial 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 Fukuoka Financial Group, you can compare the effects of market volatilities on GungHo Online and Fukuoka Financial 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 Fukuoka Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Fukuoka Financial.
Diversification Opportunities for GungHo Online and Fukuoka Financial
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GungHo and Fukuoka is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Fukuoka Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fukuoka Financial 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 Fukuoka Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fukuoka Financial has no effect on the direction of GungHo Online i.e., GungHo Online and Fukuoka Financial go up and down completely randomly.
Pair Corralation between GungHo Online and Fukuoka Financial
Assuming the 90 days horizon GungHo Online Entertainment is expected to generate 2.03 times more return on investment than Fukuoka Financial. However, GungHo Online is 2.03 times more volatile than Fukuoka Financial Group. It trades about 0.15 of its potential returns per unit of risk. Fukuoka Financial Group is currently generating about -0.66 per unit of risk. If you would invest 1,900 in GungHo Online Entertainment on October 7, 2024 and sell it today you would earn a total of 100.00 from holding GungHo Online Entertainment or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GungHo Online Entertainment vs. Fukuoka Financial Group
Performance |
| Timeline |
| GungHo Online Entert |
| Fukuoka Financial |
GungHo Online and Fukuoka Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Fukuoka Financial
The main advantage of trading using opposite GungHo Online and Fukuoka Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Fukuoka Financial 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 Fukuoka Financial will offset losses from the drop in Fukuoka Financial's long position.| GungHo Online vs. Nintendo Co | GungHo Online vs. Sea Limited | GungHo Online vs. Electronic Arts | GungHo Online vs. NEXON Co |
| Fukuoka Financial vs. Boyd Gaming | Fukuoka Financial vs. Nissan Chemical Corp | Fukuoka Financial vs. ANGLER GAMING PLC | Fukuoka Financial vs. AIR PRODCHEMICALS |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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