Correlation Between Nishi-Nippon Railroad and GungHo Online
Can any of the company-specific risk be diversified away by investing in both Nishi-Nippon Railroad 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 Nishi-Nippon Railroad and GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nishi Nippon Railroad Co and GungHo Online Entertainment, you can compare the effects of market volatilities on Nishi-Nippon Railroad 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 Nishi-Nippon Railroad with a short position of GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nishi-Nippon Railroad and GungHo Online.
Diversification Opportunities for Nishi-Nippon Railroad and GungHo Online
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nishi-Nippon and GungHo is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nishi Nippon Railroad Co 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 Nishi-Nippon Railroad 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 Nishi Nippon Railroad Co 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 Nishi-Nippon Railroad i.e., Nishi-Nippon Railroad and GungHo Online go up and down completely randomly.
Pair Corralation between Nishi-Nippon Railroad and GungHo Online
Assuming the 90 days horizon Nishi Nippon Railroad Co is expected to under-perform the GungHo Online. But the stock apears to be less risky and, when comparing its historical volatility, Nishi Nippon Railroad Co is 1.58 times less risky than GungHo Online. The stock trades about -0.01 of its potential returns per unit of risk. The GungHo Online Entertainment is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,340 in GungHo Online Entertainment on September 3, 2024 and sell it today you would earn a total of 500.00 from holding GungHo Online Entertainment or generate 37.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nishi Nippon Railroad Co vs. GungHo Online Entertainment
Performance |
| Timeline |
| Nishi Nippon Railroad |
| GungHo Online Entert |
Nishi-Nippon Railroad and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nishi-Nippon Railroad and GungHo Online
The main advantage of trading using opposite Nishi-Nippon Railroad and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nishi-Nippon Railroad 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.| Nishi-Nippon Railroad vs. BJs Wholesale Club | Nishi-Nippon Railroad vs. Cars Inc | Nishi-Nippon Railroad vs. Costco Wholesale Corp | Nishi-Nippon Railroad vs. EHEALTH |
| GungHo Online vs. JIAHUA STORES | GungHo Online vs. FUYO GENERAL LEASE | GungHo Online vs. THORNEY TECHS LTD | GungHo Online vs. QURATE RETAIL 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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