Correlation Between GungHo Online and Take-Two Interactive
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Take-Two Interactive 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 Take-Two Interactive 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 Take Two Interactive Software, you can compare the effects of market volatilities on GungHo Online and Take-Two Interactive 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 Take-Two Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Take-Two Interactive.
Diversification Opportunities for GungHo Online and Take-Two Interactive
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between GungHo and Take-Two is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive 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 Take-Two Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of GungHo Online i.e., GungHo Online and Take-Two Interactive go up and down completely randomly.
Pair Corralation between GungHo Online and Take-Two Interactive
Assuming the 90 days horizon GungHo Online Entertainment is expected to under-perform the Take-Two Interactive. In addition to that, GungHo Online is 1.33 times more volatile than Take Two Interactive Software. It trades about -0.13 of its total potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.45 per unit of volatility. If you would invest 15,072 in Take Two Interactive Software on September 4, 2024 and sell it today you would earn a total of 2,772 from holding Take Two Interactive Software or generate 18.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GungHo Online Entertainment vs. Take Two Interactive Software
Performance |
| Timeline |
| GungHo Online Entert |
| Take Two Interactive |
GungHo Online and Take-Two Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Take-Two Interactive
The main advantage of trading using opposite GungHo Online and Take-Two Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Take-Two Interactive 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 Take-Two Interactive will offset losses from the drop in Take-Two Interactive's long position.| GungHo Online vs. Nintendo Co | GungHo Online vs. Nintendo Co | GungHo Online vs. Sea Limited | GungHo Online vs. Take Two Interactive Software |
| Take-Two Interactive vs. Nintendo Co | Take-Two Interactive vs. Nintendo Co | Take-Two Interactive vs. Sea Limited | Take-Two Interactive vs. Bilibili |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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