Correlation Between GungHo Online and Aluminumof China
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Aluminumof 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 Aluminumof 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 Aluminum of, you can compare the effects of market volatilities on GungHo Online and Aluminumof 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 Aluminumof China. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Aluminumof China.
Diversification Opportunities for GungHo Online and Aluminumof China
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GungHo and Aluminumof is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminumof China 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 Aluminumof China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminumof China has no effect on the direction of GungHo Online i.e., GungHo Online and Aluminumof China go up and down completely randomly.
Pair Corralation between GungHo Online and Aluminumof China
Assuming the 90 days horizon GungHo Online Entertainment is expected to under-perform the Aluminumof China. But the stock apears to be less risky and, when comparing its historical volatility, GungHo Online Entertainment is 1.76 times less risky than Aluminumof China. The stock trades about -0.05 of its potential returns per unit of risk. The Aluminum of is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 56.00 in Aluminum of on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Aluminum of or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GungHo Online Entertainment vs. Aluminum of
Performance |
| Timeline |
| GungHo Online Entert |
| Aluminumof China |
GungHo Online and Aluminumof China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Aluminumof China
The main advantage of trading using opposite GungHo Online and Aluminumof China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Aluminumof 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 Aluminumof China will offset losses from the drop in Aluminumof China's long position.| GungHo Online vs. NEXON Co | GungHo Online vs. Take Two Interactive Software | GungHo Online vs. Superior Plus Corp | GungHo Online vs. SIVERS SEMICONDUCTORS AB |
| Aluminumof China vs. Norsk Hydro ASA | Aluminumof China vs. Kaiser Aluminum | Aluminumof China vs. Superior Plus Corp | Aluminumof China vs. SIVERS SEMICONDUCTORS AB |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |