Correlation Between GungHo Online and NorAm Drilling
Can any of the company-specific risk be diversified away by investing in both GungHo Online and NorAm Drilling 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 NorAm Drilling 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 NorAm Drilling AS, you can compare the effects of market volatilities on GungHo Online and NorAm Drilling 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 NorAm Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and NorAm Drilling.
Diversification Opportunities for GungHo Online and NorAm Drilling
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between GungHo and NorAm is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and NorAm Drilling AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorAm Drilling AS 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 NorAm Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorAm Drilling AS has no effect on the direction of GungHo Online i.e., GungHo Online and NorAm Drilling go up and down completely randomly.
Pair Corralation between GungHo Online and NorAm Drilling
Assuming the 90 days horizon GungHo Online is expected to generate 3.84 times less return on investment than NorAm Drilling. But when comparing it to its historical volatility, GungHo Online Entertainment is 1.41 times less risky than NorAm Drilling. It trades about 0.06 of its potential returns per unit of risk. NorAm Drilling AS is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 65.00 in NorAm Drilling AS on September 14, 2024 and sell it today you would earn a total of 229.00 from holding NorAm Drilling AS or generate 352.31% 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. NorAm Drilling AS
Performance |
| Timeline |
| GungHo Online Entert |
| NorAm Drilling AS |
GungHo Online and NorAm Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and NorAm Drilling
The main advantage of trading using opposite GungHo Online and NorAm Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, NorAm Drilling 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 NorAm Drilling will offset losses from the drop in NorAm Drilling's long position.| GungHo Online vs. NEXON Co | GungHo Online vs. Take Two Interactive Software | GungHo Online vs. Superior Plus Corp | GungHo Online vs. SIVERS SEMICONDUCTORS AB |
| NorAm Drilling vs. Apple Inc | NorAm Drilling vs. Apple Inc | NorAm Drilling vs. Apple Inc | NorAm Drilling vs. Apple Inc |
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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