Correlation Between GungHo Online and Computershare
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Computershare 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 Computershare 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 Computershare Limited, you can compare the effects of market volatilities on GungHo Online and Computershare 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 Computershare. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Computershare.
Diversification Opportunities for GungHo Online and Computershare
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GungHo and Computershare is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Computershare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computershare Limited 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 Computershare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computershare Limited has no effect on the direction of GungHo Online i.e., GungHo Online and Computershare go up and down completely randomly.
Pair Corralation between GungHo Online and Computershare
Assuming the 90 days horizon GungHo Online is expected to generate 2.63 times less return on investment than Computershare. In addition to that, GungHo Online is 1.52 times more volatile than Computershare Limited. It trades about 0.02 of its total potential returns per unit of risk. Computershare Limited is currently generating about 0.08 per unit of volatility. If you would invest 1,239 in Computershare Limited on August 24, 2024 and sell it today you would earn a total of 651.00 from holding Computershare Limited or generate 52.54% 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. Computershare Limited
Performance |
| Timeline |
| GungHo Online Entert |
| Computershare Limited |
GungHo Online and Computershare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Computershare
The main advantage of trading using opposite GungHo Online and Computershare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Computershare 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 Computershare will offset losses from the drop in Computershare's long position.| GungHo Online vs. Computershare Limited | GungHo Online vs. INTERSHOP Communications Aktiengesellschaft | GungHo Online vs. ON SEMICONDUCTOR | GungHo Online vs. Charter Communications |
| Computershare vs. Accenture plc | Computershare vs. Cognizant Technology Solutions | Computershare vs. Superior Plus Corp | Computershare vs. NMI Holdings |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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