Correlation Between GungHo Online and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Ebro Foods 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 Ebro Foods 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 Ebro Foods SA, you can compare the effects of market volatilities on GungHo Online and Ebro Foods 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 Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Ebro Foods.
Diversification Opportunities for GungHo Online and Ebro Foods
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GungHo and Ebro is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Ebro Foods SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods SA 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 Ebro Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebro Foods SA has no effect on the direction of GungHo Online i.e., GungHo Online and Ebro Foods go up and down completely randomly.
Pair Corralation between GungHo Online and Ebro Foods
Assuming the 90 days horizon GungHo Online Entertainment is expected to generate 1.91 times more return on investment than Ebro Foods. However, GungHo Online is 1.91 times more volatile than Ebro Foods SA. It trades about 0.07 of its potential returns per unit of risk. Ebro Foods SA is currently generating about 0.04 per unit of risk. If you would invest 1,920 in GungHo Online Entertainment on November 7, 2024 and sell it today you would earn a total of 50.00 from holding GungHo Online Entertainment or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
GungHo Online Entertainment vs. Ebro Foods SA
Performance |
| Timeline |
| GungHo Online Entert |
| Ebro Foods SA |
GungHo Online and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Ebro Foods
The main advantage of trading using opposite GungHo Online and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Ebro Foods 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 Ebro Foods will offset losses from the drop in Ebro Foods' long position.| GungHo Online vs. HF SINCLAIR P | GungHo Online vs. Spirent Communications plc | GungHo Online vs. SYSTEMAIR AB | GungHo Online vs. Norwegian Air Shuttle |
| Ebro Foods vs. 24SEVENOFFICE GROUP AB | Ebro Foods vs. Daito Trust Construction | Ebro Foods vs. TITAN MACHINERY | Ebro Foods vs. SCANSOURCE |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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