Correlation Between Adtalem Global and GungHo Online
Can any of the company-specific risk be diversified away by investing in both Adtalem Global 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 Adtalem Global and GungHo Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adtalem Global Education and GungHo Online Entertainment, you can compare the effects of market volatilities on Adtalem Global 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 Adtalem Global with a short position of GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adtalem Global and GungHo Online.
Diversification Opportunities for Adtalem Global and GungHo Online
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adtalem and GungHo is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Adtalem Global Education 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 Adtalem Global 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 Adtalem Global Education 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 Adtalem Global i.e., Adtalem Global and GungHo Online go up and down completely randomly.
Pair Corralation between Adtalem Global and GungHo Online
Assuming the 90 days trading horizon Adtalem Global Education is expected to generate 0.98 times more return on investment than GungHo Online. However, Adtalem Global Education is 1.02 times less risky than GungHo Online. It trades about 0.07 of its potential returns per unit of risk. GungHo Online Entertainment is currently generating about -0.04 per unit of risk. If you would invest 8,650 in Adtalem Global Education on December 29, 2024 and sell it today you would earn a total of 800.00 from holding Adtalem Global Education or generate 9.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Adtalem Global Education vs. GungHo Online Entertainment
Performance |
Timeline |
Adtalem Global Education |
GungHo Online Entert |
Adtalem Global and GungHo Online Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Adtalem Global and GungHo Online
The main advantage of trading using opposite Adtalem Global and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adtalem Global 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.Adtalem Global vs. Eidesvik Offshore ASA | Adtalem Global vs. Globex Mining Enterprises | Adtalem Global vs. Eurasia Mining Plc | Adtalem Global vs. Aya Gold Silver |
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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 Stocks Directory module to find actively traded stocks across global markets.
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