Correlation Between GungHo Online and ITV Plc
Can any of the company-specific risk be diversified away by investing in both GungHo Online and ITV Plc 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 ITV Plc 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 ITV plc, you can compare the effects of market volatilities on GungHo Online and ITV Plc 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 ITV Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and ITV Plc.
Diversification Opportunities for GungHo Online and ITV Plc
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GungHo and ITV is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and ITV plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITV plc 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 ITV Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITV plc has no effect on the direction of GungHo Online i.e., GungHo Online and ITV Plc go up and down completely randomly.
Pair Corralation between GungHo Online and ITV Plc
Assuming the 90 days horizon GungHo Online is expected to generate 1.19 times less return on investment than ITV Plc. But when comparing it to its historical volatility, GungHo Online Entertainment is 1.24 times less risky than ITV Plc. It trades about 0.03 of its potential returns per unit of risk. ITV plc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 71.00 in ITV plc on September 13, 2024 and sell it today you would earn a total of 18.00 from holding ITV plc or generate 25.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
GungHo Online Entertainment vs. ITV plc
Performance |
| Timeline |
| GungHo Online Entert |
| ITV plc |
GungHo Online and ITV Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and ITV Plc
The main advantage of trading using opposite GungHo Online and ITV Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, ITV Plc 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 ITV Plc will offset losses from the drop in ITV Plc's long position.| GungHo Online vs. Infrastrutture Wireless Italiane | GungHo Online vs. CENTURIA OFFICE REIT | GungHo Online vs. MAVEN WIRELESS SWEDEN | GungHo Online vs. CITY OFFICE REIT |
| ITV Plc vs. New Residential Investment | ITV Plc vs. Gladstone Investment | ITV Plc vs. AGNC INVESTMENT | ITV Plc vs. AOYAMA TRADING |
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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