Correlation Between GungHo Online and Micron Technology
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Micron Technology 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 Micron Technology 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 Micron Technology, you can compare the effects of market volatilities on GungHo Online and Micron Technology 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 Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Micron Technology.
Diversification Opportunities for GungHo Online and Micron Technology
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GungHo and Micron is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology 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 Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of GungHo Online i.e., GungHo Online and Micron Technology go up and down completely randomly.
Pair Corralation between GungHo Online and Micron Technology
Assuming the 90 days horizon GungHo Online Entertainment is expected to generate 0.59 times more return on investment than Micron Technology. However, GungHo Online Entertainment is 1.68 times less risky than Micron Technology. It trades about 0.02 of its potential returns per unit of risk. Micron Technology is currently generating about -0.01 per unit of risk. If you would invest 1,880 in GungHo Online Entertainment on October 17, 2024 and sell it today you would earn a total of 10.00 from holding GungHo Online Entertainment or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GungHo Online Entertainment vs. Micron Technology
Performance |
| Timeline |
| GungHo Online Entert |
| Micron Technology |
GungHo Online and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Micron Technology
The main advantage of trading using opposite GungHo Online and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Micron Technology 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 Micron Technology will offset losses from the drop in Micron Technology's long position.| GungHo Online vs. DATATEC LTD 2 | GungHo Online vs. SILVER BULLET DATA | GungHo Online vs. Lendlease Group | GungHo Online vs. China Datang |
| Micron Technology vs. PACIFIC ONLINE | Micron Technology vs. MUTUIONLINE | Micron Technology vs. PT Steel Pipe | Micron Technology vs. GungHo Online Entertainment |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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