Correlation Between GungHo Online and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both GungHo Online and SWISS WATER 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on GungHo Online and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and SWISS WATER.
Diversification Opportunities for GungHo Online and SWISS WATER
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between GungHo and SWISS is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of GungHo Online i.e., GungHo Online and SWISS WATER go up and down completely randomly.
Pair Corralation between GungHo Online and SWISS WATER
Assuming the 90 days horizon GungHo Online is expected to generate 1.08 times less return on investment than SWISS WATER. But when comparing it to its historical volatility, GungHo Online Entertainment is 1.25 times less risky than SWISS WATER. It trades about 0.04 of its potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 188.00 in SWISS WATER DECAFFCOFFEE on October 7, 2024 and sell it today you would earn a total of 62.00 from holding SWISS WATER DECAFFCOFFEE or generate 32.98% 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. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| GungHo Online Entert |
| SWISS WATER DECAFFCOFFEE |
GungHo Online and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and SWISS WATER
The main advantage of trading using opposite GungHo Online and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.| GungHo Online vs. Nintendo Co | GungHo Online vs. Sea Limited | GungHo Online vs. Electronic Arts | GungHo Online vs. NEXON Co |
| SWISS WATER vs. Corsair Gaming | SWISS WATER vs. Sumitomo Rubber Industries | SWISS WATER vs. PT Wintermar Offshore | SWISS WATER vs. Goodyear Tire Rubber |
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 Stocks Directory module to find actively traded stocks across global markets.
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