Correlation Between GungHo Online and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Lamar Advertising 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 Lamar Advertising 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 Lamar Advertising, you can compare the effects of market volatilities on GungHo Online and Lamar Advertising 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 Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Lamar Advertising.
Diversification Opportunities for GungHo Online and Lamar Advertising
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GungHo and Lamar is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising 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 Lamar Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamar Advertising has no effect on the direction of GungHo Online i.e., GungHo Online and Lamar Advertising go up and down completely randomly.
Pair Corralation between GungHo Online and Lamar Advertising
Assuming the 90 days horizon GungHo Online Entertainment is expected to generate 1.81 times more return on investment than Lamar Advertising. However, GungHo Online is 1.81 times more volatile than Lamar Advertising. It trades about 0.06 of its potential returns per unit of risk. Lamar Advertising is currently generating about 0.09 per unit of risk. If you would invest 1,520 in GungHo Online Entertainment on November 3, 2024 and sell it today you would earn a total of 450.00 from holding GungHo Online Entertainment or generate 29.61% 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. Lamar Advertising
Performance |
| Timeline |
| GungHo Online Entert |
| Lamar Advertising |
GungHo Online and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Lamar Advertising
The main advantage of trading using opposite GungHo Online and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Lamar Advertising 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 Lamar Advertising will offset losses from the drop in Lamar Advertising's long position.| GungHo Online vs. PLANT VEDA FOODS | GungHo Online vs. Cal Maine Foods | GungHo Online vs. VARIOUS EATERIES LS | GungHo Online vs. Ebro Foods SA |
| Lamar Advertising vs. HOCHSCHILD MINING | Lamar Advertising vs. Media and Games | Lamar Advertising vs. Scientific Games | Lamar Advertising vs. DETALION GAMES SA |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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