Correlation Between GungHo Online and Federal Agricultural
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Federal Agricultural 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 Federal Agricultural 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 Federal Agricultural Mortgage, you can compare the effects of market volatilities on GungHo Online and Federal Agricultural 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 Federal Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Federal Agricultural.
Diversification Opportunities for GungHo Online and Federal Agricultural
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between GungHo and Federal is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Federal Agricultural Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Agricultural 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 Federal Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Agricultural has no effect on the direction of GungHo Online i.e., GungHo Online and Federal Agricultural go up and down completely randomly.
Pair Corralation between GungHo Online and Federal Agricultural
Assuming the 90 days horizon GungHo Online Entertainment is expected to generate 1.37 times more return on investment than Federal Agricultural. However, GungHo Online is 1.37 times more volatile than Federal Agricultural Mortgage. It trades about 0.02 of its potential returns per unit of risk. Federal Agricultural Mortgage is currently generating about -0.32 per unit of risk. If you would invest 1,910 in GungHo Online Entertainment on October 10, 2024 and sell it today you would earn a total of 10.00 from holding GungHo Online Entertainment or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
GungHo Online Entertainment vs. Federal Agricultural Mortgage
Performance |
| Timeline |
| GungHo Online Entert |
| Federal Agricultural |
GungHo Online and Federal Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Federal Agricultural
The main advantage of trading using opposite GungHo Online and Federal Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Federal Agricultural 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 Federal Agricultural will offset losses from the drop in Federal Agricultural's long position.| GungHo Online vs. Sea Limited | GungHo Online vs. Electronic Arts | GungHo Online vs. NEXON Co | GungHo Online vs. NEXON Co |
| Federal Agricultural vs. China Eastern Airlines | Federal Agricultural vs. AEGEAN AIRLINES | Federal Agricultural vs. ADRIATIC METALS LS 013355 | Federal Agricultural vs. SINGAPORE AIRLINES |
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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