Correlation Between GungHo Online and SOFI TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both GungHo Online and SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES, you can compare the effects of market volatilities on GungHo Online and SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and SOFI TECHNOLOGIES.
Diversification Opportunities for GungHo Online and SOFI TECHNOLOGIES
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GungHo and SOFI is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and SOFI TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOFI TECHNOLOGIES has no effect on the direction of GungHo Online i.e., GungHo Online and SOFI TECHNOLOGIES go up and down completely randomly.
Pair Corralation between GungHo Online and SOFI TECHNOLOGIES
Assuming the 90 days horizon GungHo Online Entertainment is expected to under-perform the SOFI TECHNOLOGIES. But the stock apears to be less risky and, when comparing its historical volatility, GungHo Online Entertainment is 1.45 times less risky than SOFI TECHNOLOGIES. The stock trades about -0.1 of its potential returns per unit of risk. The SOFI TECHNOLOGIES is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,451 in SOFI TECHNOLOGIES on October 20, 2024 and sell it today you would earn a total of 139.00 from holding SOFI TECHNOLOGIES or generate 9.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GungHo Online Entertainment vs. SOFI TECHNOLOGIES
Performance |
| Timeline |
| GungHo Online Entert |
| SOFI TECHNOLOGIES |
GungHo Online and SOFI TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and SOFI TECHNOLOGIES
The main advantage of trading using opposite GungHo Online and SOFI TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES will offset losses from the drop in SOFI TECHNOLOGIES's long position.| GungHo Online vs. Global Ship Lease | GungHo Online vs. Columbia Sportswear | GungHo Online vs. COLUMBIA SPORTSWEAR | GungHo Online vs. InPlay Oil Corp |
| SOFI TECHNOLOGIES vs. EBRO FOODS | SOFI TECHNOLOGIES vs. AUSNUTRIA DAIRY | SOFI TECHNOLOGIES vs. Nomad Foods | SOFI TECHNOLOGIES vs. SENECA FOODS A |
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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