Correlation Between GungHo Online and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Methode Electronics 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 Methode Electronics 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 Methode Electronics, you can compare the effects of market volatilities on GungHo Online and Methode Electronics 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 Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Methode Electronics.
Diversification Opportunities for GungHo Online and Methode Electronics
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between GungHo and Methode is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics 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 Methode Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Methode Electronics has no effect on the direction of GungHo Online i.e., GungHo Online and Methode Electronics go up and down completely randomly.
Pair Corralation between GungHo Online and Methode Electronics
Assuming the 90 days horizon GungHo Online Entertainment is expected to under-perform the Methode Electronics. But the stock apears to be less risky and, when comparing its historical volatility, GungHo Online Entertainment is 1.71 times less risky than Methode Electronics. The stock trades about -0.13 of its potential returns per unit of risk. The Methode Electronics is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 815.00 in Methode Electronics on September 4, 2024 and sell it today you would earn a total of 180.00 from holding Methode Electronics or generate 22.09% 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. Methode Electronics
Performance |
| Timeline |
| GungHo Online Entert |
| Methode Electronics |
GungHo Online and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Methode Electronics
The main advantage of trading using opposite GungHo Online and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Methode Electronics 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 Methode Electronics will offset losses from the drop in Methode Electronics' long position.| GungHo Online vs. Nintendo Co | GungHo Online vs. Nintendo Co | GungHo Online vs. Sea Limited | GungHo Online vs. Take Two Interactive Software |
| Methode Electronics vs. Performance Food Group | Methode Electronics vs. CN MODERN DAIRY | Methode Electronics vs. PT Indofood Sukses | Methode Electronics vs. Astral Foods Limited |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Stocks Directory Find actively traded stocks across global markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |