Correlation Between Japan Asia and GungHo Online
Can any of the company-specific risk be diversified away by investing in both Japan Asia and GungHo Online 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 Japan Asia and GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and GungHo Online Entertainment, you can compare the effects of market volatilities on Japan Asia and GungHo Online 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 Japan Asia with a short position of GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and GungHo Online.
Diversification Opportunities for Japan Asia and GungHo Online
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japan and GungHo is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and GungHo Online Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GungHo Online Entert and Japan Asia 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 Japan Asia Investment are associated (or correlated) with GungHo Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GungHo Online Entert has no effect on the direction of Japan Asia i.e., Japan Asia and GungHo Online go up and down completely randomly.
Pair Corralation between Japan Asia and GungHo Online
Assuming the 90 days horizon Japan Asia is expected to generate 6.12 times less return on investment than GungHo Online. In addition to that, Japan Asia is 1.47 times more volatile than GungHo Online Entertainment. It trades about 0.0 of its total potential returns per unit of risk. GungHo Online Entertainment is currently generating about 0.03 per unit of volatility. If you would invest 1,490 in GungHo Online Entertainment on September 12, 2024 and sell it today you would earn a total of 420.00 from holding GungHo Online Entertainment or generate 28.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. GungHo Online Entertainment
Performance |
| Timeline |
| Japan Asia Investment |
| GungHo Online Entert |
Japan Asia and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and GungHo Online
The main advantage of trading using opposite Japan Asia and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia position performs unexpectedly, GungHo Online 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 GungHo Online will offset losses from the drop in GungHo Online's long position.| Japan Asia vs. Ameriprise Financial | Japan Asia vs. Ares Management Corp | Japan Asia vs. Superior Plus Corp | Japan Asia vs. SIVERS SEMICONDUCTORS AB |
| GungHo Online vs. NEXON Co | GungHo Online vs. Take Two Interactive Software | GungHo Online vs. Superior Plus Corp | GungHo Online vs. SIVERS SEMICONDUCTORS AB |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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