Correlation Between GungHo Online and Zoom Video

Can any of the company-specific risk be diversified away by investing in both GungHo Online and Zoom Video 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 GungHo Online and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GungHo Online Entertainment and Zoom Video Communications, you can compare the effects of market volatilities on GungHo Online and Zoom Video 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 GungHo Online with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Zoom Video.

Diversification Opportunities for GungHo Online and Zoom Video

0.49

Correlation Coefficient

GungHo Online  Zoom Video

Very weak diversification

The 3 months correlation between GungHo and Zoom is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications and GungHo Online 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 GungHo Online Entertainment are associated (or correlated) with Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of GungHo Online i.e., GungHo Online and Zoom Video go up and down completely randomly.

Pair Corralation between GungHo Online and Zoom Video

Assuming the 90 days horizon GungHo Online Entertainment is expected to generate 1.02 times more return on investment than Zoom Video. However, GungHo Online is 1.02 times more volatile than Zoom Video Communications. It trades about -0.05 of its potential returns per unit of risk. Zoom Video Communications is currently generating about -0.12 per unit of risk. If you would invest  1,912  in GungHo Online Entertainment on December 21, 2024 and sell it today you would lose (152.00) from holding GungHo Online Entertainment or give up 7.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

GungHo Online Entertainment  vs.  Zoom Video Communications

GungHo Online Entert

Risk-Adjusted Performance

Very Weak

Over the last 90 days GungHo Online Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Zoom Video Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zoom Video Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with GungHo Online and Zoom Video

The main advantage of trading using opposite GungHo Online and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video's long position.

The idea behind GungHo Online Entertainment and Zoom Video Communications 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.