Correlation Between GungHo Online and GREENX METALS
Can any of the company-specific risk be diversified away by investing in both GungHo Online and GREENX METALS 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 GREENX METALS 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 GREENX METALS LTD, you can compare the effects of market volatilities on GungHo Online and GREENX METALS 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 GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and GREENX METALS.
Diversification Opportunities for GungHo Online and GREENX METALS
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GungHo and GREENX is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD 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 GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of GungHo Online i.e., GungHo Online and GREENX METALS go up and down completely randomly.
Pair Corralation between GungHo Online and GREENX METALS
Assuming the 90 days horizon GungHo Online is expected to generate 1.45 times less return on investment than GREENX METALS. But when comparing it to its historical volatility, GungHo Online Entertainment is 2.17 times less risky than GREENX METALS. It trades about 0.03 of its potential returns per unit of risk. GREENX METALS LTD is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 43.00 in GREENX METALS LTD on October 16, 2024 and sell it today you would lose (1.00) from holding GREENX METALS LTD or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GungHo Online Entertainment vs. GREENX METALS LTD
Performance |
| Timeline |
| GungHo Online Entert |
| GREENX METALS LTD |
GungHo Online and GREENX METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and GREENX METALS
The main advantage of trading using opposite GungHo Online and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, GREENX METALS 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 GREENX METALS will offset losses from the drop in GREENX METALS's long position.| GungHo Online vs. The Yokohama Rubber | GungHo Online vs. THRACE PLASTICS | GungHo Online vs. PLAY2CHILL SA ZY | GungHo Online vs. Martin Marietta Materials |
| GREENX METALS vs. North American Construction | GREENX METALS vs. GungHo Online Entertainment | GREENX METALS vs. TITAN MACHINERY | GREENX METALS vs. SALESFORCE INC CDR |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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