Correlation Between GungHo Online and Perma-Fix Environmental

Can any of the company-specific risk be diversified away by investing in both GungHo Online and Perma-Fix Environmental 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 Perma-Fix Environmental 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 Perma Fix Environmental Services, you can compare the effects of market volatilities on GungHo Online and Perma-Fix Environmental 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 Perma-Fix Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and Perma-Fix Environmental.

Diversification Opportunities for GungHo Online and Perma-Fix Environmental

-0.14

Correlation Coefficient

GungHo Online  Perma-Fix Environmental

Good diversification

The 3 months correlation between GungHo and Perma-Fix is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and Perma Fix Environmental Servic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perma Fix Environmental 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 Perma-Fix Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perma Fix Environmental has no effect on the direction of GungHo Online i.e., GungHo Online and Perma-Fix Environmental go up and down completely randomly.

Pair Corralation between GungHo Online and Perma-Fix Environmental

Assuming the 90 days horizon GungHo Online is expected to generate 4.4 times less return on investment than Perma-Fix Environmental. But when comparing it to its historical volatility, GungHo Online Entertainment is 1.96 times less risky than Perma-Fix Environmental. It trades about 0.03 of its potential returns per unit of risk. Perma Fix Environmental Services is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  386.00  in Perma Fix Environmental Services on October 23, 2024 and sell it today you would earn a total of  664.00  from holding Perma Fix Environmental Services or generate 172.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

GungHo Online Entertainment  vs.  Perma Fix Environmental Servic

GungHo Online Entert

Risk-Adjusted Performance

0 of 100

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 nearly stable basic indicators, GungHo Online is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Perma Fix Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perma Fix Environmental Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 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 Perma-Fix Environmental

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

The idea behind GungHo Online Entertainment and Perma Fix Environmental Services 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.