Correlation Between NAKED WINES and GungHo Online
Can any of the company-specific risk be diversified away by investing in both NAKED WINES 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 NAKED WINES and GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAKED WINES PLC and GungHo Online Entertainment, you can compare the effects of market volatilities on NAKED WINES 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 NAKED WINES with a short position of GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and GungHo Online.
Diversification Opportunities for NAKED WINES and GungHo Online
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NAKED and GungHo is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC 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 NAKED WINES 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 NAKED WINES PLC 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 NAKED WINES i.e., NAKED WINES and GungHo Online go up and down completely randomly.
Pair Corralation between NAKED WINES and GungHo Online
Assuming the 90 days horizon NAKED WINES PLC is expected to under-perform the GungHo Online. In addition to that, NAKED WINES is 1.57 times more volatile than GungHo Online Entertainment. It trades about -0.04 of its total potential returns per unit of risk. GungHo Online Entertainment is currently generating about -0.05 per unit of volatility. If you would invest 1,950 in GungHo Online Entertainment on October 24, 2024 and sell it today you would lose (50.00) from holding GungHo Online Entertainment or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. GungHo Online Entertainment
Performance |
| Timeline |
| NAKED WINES PLC |
| GungHo Online Entert |
NAKED WINES and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and GungHo Online
The main advantage of trading using opposite NAKED WINES and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES 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.| NAKED WINES vs. Guangdong Investment Limited | NAKED WINES vs. TOWNSQUARE MEDIA INC | NAKED WINES vs. Nexstar Media Group | NAKED WINES vs. ATRESMEDIA |
| GungHo Online vs. Methode Electronics | GungHo Online vs. Delta Electronics Public | GungHo Online vs. Nucletron Electronic Aktiengesellschaft | GungHo Online vs. MUTUIONLINE |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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