Correlation Between GungHo Online and Japan Asia
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Japan Asia 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 Japan Asia 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 Japan Asia Investment, you can compare the effects of market volatilities on GungHo Online and Japan Asia 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 Japan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Japan Asia.
Diversification Opportunities for GungHo Online and Japan Asia
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GungHo and Japan is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Japan Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Asia Investment 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 Japan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Asia Investment has no effect on the direction of GungHo Online i.e., GungHo Online and Japan Asia go up and down completely randomly.
Pair Corralation between GungHo Online and Japan Asia
Assuming the 90 days horizon GungHo Online Entertainment is expected to generate 0.68 times more return on investment than Japan Asia. However, GungHo Online Entertainment is 1.47 times less risky than Japan Asia. It trades about 0.03 of its potential returns per unit of risk. Japan Asia Investment is currently generating about 0.0 per unit of risk. If you would invest 1,490 in GungHo Online Entertainment on September 12, 2024 and sell it today you would earn a total of 420.00 from holding GungHo Online Entertainment or generate 28.19% 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. Japan Asia Investment
Performance |
| Timeline |
| GungHo Online Entert |
| Japan Asia Investment |
GungHo Online and Japan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Japan Asia
The main advantage of trading using opposite GungHo Online and Japan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Japan Asia 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 Japan Asia will offset losses from the drop in Japan Asia's long position.| GungHo Online vs. NEXON Co | GungHo Online vs. Take Two Interactive Software | GungHo Online vs. Superior Plus Corp | GungHo Online vs. SIVERS SEMICONDUCTORS AB |
| Japan Asia vs. Ameriprise Financial | Japan Asia vs. Ares Management Corp | Japan Asia vs. Superior Plus Corp | Japan Asia vs. SIVERS SEMICONDUCTORS AB |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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