Correlation Between ETFS Coffee and GungHo Online
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee 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 ETFS Coffee and GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFS Coffee ETC and GungHo Online Entertainment, you can compare the effects of market volatilities on ETFS Coffee 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 ETFS Coffee with a short position of GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and GungHo Online.
Diversification Opportunities for ETFS Coffee and GungHo Online
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ETFS and GungHo is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC 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 ETFS Coffee 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 ETFS Coffee ETC 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 ETFS Coffee i.e., ETFS Coffee and GungHo Online go up and down completely randomly.
Pair Corralation between ETFS Coffee and GungHo Online
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 1.78 times more return on investment than GungHo Online. However, ETFS Coffee is 1.78 times more volatile than GungHo Online Entertainment. It trades about 0.2 of its potential returns per unit of risk. GungHo Online Entertainment is currently generating about 0.29 per unit of risk. If you would invest 4,766 in ETFS Coffee ETC on September 22, 2024 and sell it today you would earn a total of 618.00 from holding ETFS Coffee ETC or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
ETFS Coffee ETC vs. GungHo Online Entertainment
Performance |
| Timeline |
| ETFS Coffee ETC |
| GungHo Online Entert |
ETFS Coffee and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and GungHo Online
The main advantage of trading using opposite ETFS Coffee and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee 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.| ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc | ETFS Coffee vs. Apple Inc |
| GungHo Online vs. Nintendo Co | GungHo Online vs. Nintendo Co | GungHo Online vs. Sea Limited | GungHo Online vs. Electronic Arts |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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