Correlation Between GungHo Online and Air China
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Air China 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 Air China 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 Air China Limited, you can compare the effects of market volatilities on GungHo Online and Air China 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 Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Air China.
Diversification Opportunities for GungHo Online and Air China
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between GungHo and Air is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Air China Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China Limited 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 Air China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air China Limited has no effect on the direction of GungHo Online i.e., GungHo Online and Air China go up and down completely randomly.
Pair Corralation between GungHo Online and Air China
Assuming the 90 days horizon GungHo Online Entertainment is expected to generate 0.6 times more return on investment than Air China. However, GungHo Online Entertainment is 1.67 times less risky than Air China. It trades about -0.34 of its potential returns per unit of risk. Air China Limited is currently generating about -0.29 per unit of risk. If you would invest 1,830 in GungHo Online Entertainment on January 9, 2025 and sell it today you would lose (240.00) from holding GungHo Online Entertainment or give up 13.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GungHo Online Entertainment vs. Air China Limited
Performance |
| Timeline |
| GungHo Online Entert |
| Air China Limited |
GungHo Online and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Air China
The main advantage of trading using opposite GungHo Online and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Air China 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 Air China will offset losses from the drop in Air China's long position.| GungHo Online vs. SYSTEMAIR AB | GungHo Online vs. CN MODERN DAIRY | GungHo Online vs. Axfood AB | GungHo Online vs. Fair Isaac Corp |
| Air China vs. Delta Air Lines | Air China vs. RYANAIR HLDGS ADR | Air China vs. Southwest Airlines Co | Air China vs. China Southern 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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