Correlation Between GungHo Online and China Overseas
Can any of the company-specific risk be diversified away by investing in both GungHo Online and China Overseas 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 China Overseas 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 China Overseas Land, you can compare the effects of market volatilities on GungHo Online and China Overseas 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 China Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and China Overseas.
Diversification Opportunities for GungHo Online and China Overseas
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between GungHo and China is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and China Overseas Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Overseas Land 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 China Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Overseas Land has no effect on the direction of GungHo Online i.e., GungHo Online and China Overseas go up and down completely randomly.
Pair Corralation between GungHo Online and China Overseas
Assuming the 90 days horizon GungHo Online Entertainment is expected to generate 1.07 times more return on investment than China Overseas. However, GungHo Online is 1.07 times more volatile than China Overseas Land. It trades about -0.01 of its potential returns per unit of risk. China Overseas Land is currently generating about -0.05 per unit of risk. If you would invest 1,990 in GungHo Online Entertainment on November 3, 2024 and sell it today you would lose (20.00) from holding GungHo Online Entertainment or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GungHo Online Entertainment vs. China Overseas Land
Performance |
| Timeline |
| GungHo Online Entert |
| China Overseas Land |
GungHo Online and China Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and China Overseas
The main advantage of trading using opposite GungHo Online and China Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, China Overseas 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 China Overseas will offset losses from the drop in China Overseas' long position.| GungHo Online vs. ONWARD MEDICAL BV | GungHo Online vs. CNVISION MEDIA | GungHo Online vs. MeVis Medical Solutions | GungHo Online vs. ANTA SPORTS PRODUCT |
| China Overseas vs. Penn National Gaming | China Overseas vs. FRACTAL GAMING GROUP | China Overseas vs. PURETECH HEALTH PLC | China Overseas vs. Media and Games |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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