Correlation Between GungHo Online and Volkswagen
Can any of the company-specific risk be diversified away by investing in both GungHo Online and Volkswagen 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 Volkswagen 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 Volkswagen AG, you can compare the effects of market volatilities on GungHo Online and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Volkswagen.
Diversification Opportunities for GungHo Online and Volkswagen
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GungHo and Volkswagen is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of GungHo Online i.e., GungHo Online and Volkswagen go up and down completely randomly.
Pair Corralation between GungHo Online and Volkswagen
Assuming the 90 days horizon GungHo Online Entertainment is expected to under-perform the Volkswagen. In addition to that, GungHo Online is 1.82 times more volatile than Volkswagen AG. It trades about -0.02 of its total potential returns per unit of risk. Volkswagen AG is currently generating about 0.12 per unit of volatility. If you would invest 8,442 in Volkswagen AG on October 11, 2024 and sell it today you would earn a total of 480.00 from holding Volkswagen AG or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
GungHo Online Entertainment vs. Volkswagen AG
Performance |
| Timeline |
| GungHo Online Entert |
| Volkswagen AG |
GungHo Online and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and Volkswagen
The main advantage of trading using opposite GungHo Online and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| GungHo Online vs. Khiron Life Sciences | GungHo Online vs. NorAm Drilling AS | GungHo Online vs. Iridium Communications | GungHo Online vs. T Mobile |
| Volkswagen vs. SERI INDUSTRIAL EO | Volkswagen vs. PLAYTIKA HOLDING DL 01 | Volkswagen vs. Aristocrat Leisure Limited | Volkswagen vs. Playmates Toys Limited |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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