Correlation Between GungHo Online and Merit Medical
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Merit Medical 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 Merit Medical 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 Merit Medical Systems, you can compare the effects of market volatilities on GungHo Online and Merit Medical 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 Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Merit Medical.
Diversification Opportunities for GungHo Online and Merit Medical
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GungHo and Merit is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Merit Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merit Medical Systems 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 Merit Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merit Medical Systems has no effect on the direction of GungHo Online i.e., GungHo Online and Merit Medical go up and down completely randomly.
Pair Corralation between GungHo Online and Merit Medical
Assuming the 90 days horizon GungHo Online Entertainment is expected to under-perform the Merit Medical. In addition to that, GungHo Online is 1.85 times more volatile than Merit Medical Systems. It trades about -0.08 of its total potential returns per unit of risk. Merit Medical Systems is currently generating about 0.33 per unit of volatility. If you would invest 9,150 in Merit Medical Systems on October 29, 2024 and sell it today you would earn a total of 800.00 from holding Merit Medical Systems or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
GungHo Online Entertainment vs. Merit Medical Systems
Performance |
| Timeline |
| GungHo Online Entert |
| Merit Medical Systems |
GungHo Online and Merit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Merit Medical
The main advantage of trading using opposite GungHo Online and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Merit Medical 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 Merit Medical will offset losses from the drop in Merit Medical's long position.| GungHo Online vs. ANGLO ASIAN MINING | GungHo Online vs. FIH MOBILE | GungHo Online vs. Charter Communications | GungHo Online vs. De Grey Mining |
| Merit Medical vs. PARKEN Sport Entertainment | Merit Medical vs. CAREER EDUCATION | Merit Medical vs. Fortescue Metals Group | Merit Medical vs. DEVRY EDUCATION GRP |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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