Correlation Between GungHo Online and BANK MANDIRI

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

Diversification Opportunities for GungHo Online and BANK MANDIRI

0.02

Correlation Coefficient

GungHo Online  BANK MANDIRI

Significant diversification

The 3 months correlation between GungHo and BANK is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI 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 BANK MANDIRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK MANDIRI has no effect on the direction of GungHo Online i.e., GungHo Online and BANK MANDIRI go up and down completely randomly.

Pair Corralation between GungHo Online and BANK MANDIRI

Assuming the 90 days horizon GungHo Online is expected to generate 1.85 times less return on investment than BANK MANDIRI. But when comparing it to its historical volatility, GungHo Online Entertainment is 1.92 times less risky than BANK MANDIRI. It trades about 0.04 of its potential returns per unit of risk. BANK MANDIRI is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  26.00  in BANK MANDIRI on October 4, 2024 and sell it today you would earn a total of  12.00  from holding BANK MANDIRI or generate 46.15% return on investment over 90 days.

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

GungHo Online Entertainment  vs.  BANK MANDIRI

GungHo Online Entert

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GungHo Online Entertainment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GungHo Online may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BANK MANDIRI

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BANK MANDIRI are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BANK MANDIRI may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with GungHo Online and BANK MANDIRI

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

The idea behind GungHo Online Entertainment and BANK MANDIRI 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.