Correlation Between GungHo Online and Chesapeake Utilities
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Chesapeake Utilities 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 Chesapeake Utilities 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 Chesapeake Utilities, you can compare the effects of market volatilities on GungHo Online and Chesapeake Utilities 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 Chesapeake Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Chesapeake Utilities.
Diversification Opportunities for GungHo Online and Chesapeake Utilities
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GungHo and Chesapeake is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities 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 Chesapeake Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Utilities has no effect on the direction of GungHo Online i.e., GungHo Online and Chesapeake Utilities go up and down completely randomly.
Pair Corralation between GungHo Online and Chesapeake Utilities
Assuming the 90 days horizon GungHo Online Entertainment is expected to under-perform the Chesapeake Utilities. In addition to that, GungHo Online is 1.63 times more volatile than Chesapeake Utilities. It trades about -0.01 of its total potential returns per unit of risk. Chesapeake Utilities is currently generating about 0.04 per unit of volatility. If you would invest 11,600 in Chesapeake Utilities on November 2, 2024 and sell it today you would earn a total of 100.00 from holding Chesapeake Utilities or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GungHo Online Entertainment vs. Chesapeake Utilities
Performance |
| Timeline |
| GungHo Online Entert |
| Chesapeake Utilities |
GungHo Online and Chesapeake Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Chesapeake Utilities
The main advantage of trading using opposite GungHo Online and Chesapeake Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Chesapeake Utilities 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 Chesapeake Utilities will offset losses from the drop in Chesapeake Utilities' long position.| GungHo Online vs. Xiwang Special Steel | GungHo Online vs. PACIFIC ONLINE | GungHo Online vs. Insteel Industries | GungHo Online vs. CarsalesCom |
| Chesapeake Utilities vs. THAI BEVERAGE | Chesapeake Utilities vs. TRAVEL LEISURE DL 01 | Chesapeake Utilities vs. LG Display Co | Chesapeake Utilities vs. Tsingtao Brewery |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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