Correlation Between GungHo Online and GAMESTOP
Can any of the company-specific risk be diversified away by investing in both GungHo Online and GAMESTOP 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 GAMESTOP 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 GAMESTOP, you can compare the effects of market volatilities on GungHo Online and GAMESTOP 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 GAMESTOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and GAMESTOP.
Diversification Opportunities for GungHo Online and GAMESTOP
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between GungHo and GAMESTOP is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP 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 GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of GungHo Online i.e., GungHo Online and GAMESTOP go up and down completely randomly.
Pair Corralation between GungHo Online and GAMESTOP
Assuming the 90 days horizon GungHo Online is expected to generate 4.13 times less return on investment than GAMESTOP. But when comparing it to its historical volatility, GungHo Online Entertainment is 3.68 times less risky than GAMESTOP. It trades about 0.03 of its potential returns per unit of risk. GAMESTOP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,251 in GAMESTOP on August 27, 2024 and sell it today you would earn a total of 384.00 from holding GAMESTOP or generate 17.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GungHo Online Entertainment vs. GAMESTOP
Performance |
| Timeline |
| GungHo Online Entert |
| GAMESTOP |
GungHo Online and GAMESTOP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and GAMESTOP
The main advantage of trading using opposite GungHo Online and GAMESTOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, GAMESTOP 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 GAMESTOP will offset losses from the drop in GAMESTOP's long position.| GungHo Online vs. Aedas Homes SA | GungHo Online vs. Tri Pointe Homes | GungHo Online vs. LGI Homes | GungHo Online vs. Neinor Homes SA |
| GAMESTOP vs. DiamondRock Hospitality | GAMESTOP vs. GUARDANT HEALTH CL | GAMESTOP vs. ASPEN TECHINC DL | GAMESTOP vs. FEMALE HEALTH |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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