Correlation Between GungHo Online and UPDATE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both GungHo Online and UPDATE SOFTWARE 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 UPDATE SOFTWARE 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 UPDATE SOFTWARE, you can compare the effects of market volatilities on GungHo Online and UPDATE SOFTWARE 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 UPDATE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and UPDATE SOFTWARE.
Diversification Opportunities for GungHo Online and UPDATE SOFTWARE
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GungHo and UPDATE is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and UPDATE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPDATE SOFTWARE 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 UPDATE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPDATE SOFTWARE has no effect on the direction of GungHo Online i.e., GungHo Online and UPDATE SOFTWARE go up and down completely randomly.
Pair Corralation between GungHo Online and UPDATE SOFTWARE
Assuming the 90 days horizon GungHo Online Entertainment is expected to under-perform the UPDATE SOFTWARE. But the stock apears to be less risky and, when comparing its historical volatility, GungHo Online Entertainment is 1.37 times less risky than UPDATE SOFTWARE. The stock trades about -0.13 of its potential returns per unit of risk. The UPDATE SOFTWARE is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 1,253 in UPDATE SOFTWARE on September 4, 2024 and sell it today you would earn a total of 402.00 from holding UPDATE SOFTWARE or generate 32.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GungHo Online Entertainment vs. UPDATE SOFTWARE
Performance |
| Timeline |
| GungHo Online Entert |
| UPDATE SOFTWARE |
GungHo Online and UPDATE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and UPDATE SOFTWARE
The main advantage of trading using opposite GungHo Online and UPDATE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, UPDATE SOFTWARE 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 UPDATE SOFTWARE will offset losses from the drop in UPDATE SOFTWARE'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 |
| UPDATE SOFTWARE vs. Apple Inc | UPDATE SOFTWARE vs. Apple Inc | UPDATE SOFTWARE vs. Apple Inc | UPDATE SOFTWARE 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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