Correlation Between GungHo Online and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both GungHo Online and SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES, you can compare the effects of market volatilities on GungHo Online and SPARTAN STORES 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 SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and SPARTAN STORES.
Diversification Opportunities for GungHo Online and SPARTAN STORES
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GungHo and SPARTAN is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES 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 SPARTAN STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTAN STORES has no effect on the direction of GungHo Online i.e., GungHo Online and SPARTAN STORES go up and down completely randomly.
Pair Corralation between GungHo Online and SPARTAN STORES
Assuming the 90 days horizon GungHo Online Entertainment is expected to generate 1.08 times more return on investment than SPARTAN STORES. However, GungHo Online is 1.08 times more volatile than SPARTAN STORES. It trades about 0.03 of its potential returns per unit of risk. SPARTAN STORES is currently generating about -0.04 per unit of risk. If you would invest 1,450 in GungHo Online Entertainment on September 2, 2024 and sell it today you would earn a total of 390.00 from holding GungHo Online Entertainment or generate 26.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GungHo Online Entertainment vs. SPARTAN STORES
Performance |
| Timeline |
| GungHo Online Entert |
| SPARTAN STORES |
GungHo Online and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and SPARTAN STORES
The main advantage of trading using opposite GungHo Online and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, SPARTAN STORES 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 SPARTAN STORES will offset losses from the drop in SPARTAN STORES's long position.| GungHo Online vs. Nintendo Co | GungHo Online vs. Sea Limited | GungHo Online vs. Superior Plus Corp | GungHo Online vs. NMI Holdings |
| SPARTAN STORES vs. SIVERS SEMICONDUCTORS AB | SPARTAN STORES vs. Darden Restaurants | SPARTAN STORES vs. Reliance Steel Aluminum | SPARTAN STORES vs. Q2M Managementberatung AG |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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