Correlation Between Lendlease and GungHo Online
Can any of the company-specific risk be diversified away by investing in both Lendlease 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 Lendlease and GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and GungHo Online Entertainment, you can compare the effects of market volatilities on Lendlease 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 Lendlease with a short position of GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and GungHo Online.
Diversification Opportunities for Lendlease and GungHo Online
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lendlease and GungHo is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group 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 Lendlease 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 Lendlease Group 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 Lendlease i.e., Lendlease and GungHo Online go up and down completely randomly.
Pair Corralation between Lendlease and GungHo Online
Assuming the 90 days trading horizon Lendlease is expected to generate 9.06 times less return on investment than GungHo Online. But when comparing it to its historical volatility, Lendlease Group is 1.05 times less risky than GungHo Online. It trades about 0.0 of its potential returns per unit of risk. GungHo Online Entertainment is currently generating about 0.03 of returns per unit of risk over similar time horizon. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. GungHo Online Entertainment
Performance |
| Timeline |
| Lendlease Group |
| GungHo Online Entert |
Lendlease and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and GungHo Online
The main advantage of trading using opposite Lendlease and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease 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.The idea behind Lendlease Group and GungHo Online Entertainment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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