Correlation Between GungHo Online and BW LPG
Can any of the company-specific risk be diversified away by investing in both GungHo Online and BW LPG 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 BW LPG 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 BW LPG Limited, you can compare the effects of market volatilities on GungHo Online and BW LPG 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 BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and BW LPG.
Diversification Opportunities for GungHo Online and BW LPG
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GungHo and BW9 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and BW LPG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW LPG 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 BW LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW LPG Limited has no effect on the direction of GungHo Online i.e., GungHo Online and BW LPG go up and down completely randomly.
Pair Corralation between GungHo Online and BW LPG
Assuming the 90 days horizon GungHo Online Entertainment is expected to generate 0.73 times more return on investment than BW LPG. However, GungHo Online Entertainment is 1.36 times less risky than BW LPG. It trades about 0.06 of its potential returns per unit of risk. BW LPG Limited is currently generating about 0.03 per unit of risk. If you would invest 1,380 in GungHo Online Entertainment on August 26, 2024 and sell it today you would earn a total of 430.00 from holding GungHo Online Entertainment or generate 31.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
GungHo Online Entertainment vs. BW LPG Limited
Performance |
| Timeline |
| GungHo Online Entert |
| BW LPG Limited |
GungHo Online and BW LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and BW LPG
The main advantage of trading using opposite GungHo Online and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, BW LPG 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 BW LPG will offset losses from the drop in BW LPG's long position.| GungHo Online vs. Sea Limited | GungHo Online vs. NEXON Co | GungHo Online vs. Take Two Interactive Software | GungHo Online vs. Bilibili |
| BW LPG vs. CODERE ONLINE LUX | BW LPG vs. BOS BETTER ONLINE | BW LPG vs. China Communications Services | BW LPG vs. GungHo Online Entertainment |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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