Correlation Between GungHo Online and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Canadian 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 Canadian 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 Canadian Utilities Limited, you can compare the effects of market volatilities on GungHo Online and Canadian 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 Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Canadian Utilities.
Diversification Opportunities for GungHo Online and Canadian Utilities
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GungHo and Canadian is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Canadian Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian 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 Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of GungHo Online i.e., GungHo Online and Canadian Utilities go up and down completely randomly.
Pair Corralation between GungHo Online and Canadian Utilities
Assuming the 90 days horizon GungHo Online Entertainment is expected to under-perform the Canadian Utilities. In addition to that, GungHo Online is 4.21 times more volatile than Canadian Utilities Limited. It trades about -0.12 of its total potential returns per unit of risk. Canadian Utilities Limited is currently generating about 0.0 per unit of volatility. If you would invest 2,274 in Canadian Utilities Limited on October 20, 2024 and sell it today you would lose (1.00) from holding Canadian Utilities Limited or give up 0.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GungHo Online Entertainment vs. Canadian Utilities Limited
Performance |
| Timeline |
| GungHo Online Entert |
| Canadian Utilities |
GungHo Online and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Canadian Utilities
The main advantage of trading using opposite GungHo Online and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Canadian 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' long position.| GungHo Online vs. Global Ship Lease | GungHo Online vs. Columbia Sportswear | GungHo Online vs. COLUMBIA SPORTSWEAR | GungHo Online vs. InPlay Oil Corp |
| Canadian Utilities vs. DeVry Education Group | Canadian Utilities vs. CAREER EDUCATION | Canadian Utilities vs. Summit Materials | Canadian Utilities vs. Zoom Video Communications |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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