Correlation Between GungHo Online and ASURE SOFTWARE

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

Diversification Opportunities for GungHo Online and ASURE SOFTWARE

0.11

Correlation Coefficient

GungHo Online  ASURE SOFTWARE

Average diversification

The 3 months correlation between GungHo and ASURE is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and ASURE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASURE SOFTWARE 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 ASURE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASURE SOFTWARE has no effect on the direction of GungHo Online i.e., GungHo Online and ASURE SOFTWARE go up and down completely randomly.

Pair Corralation between GungHo Online and ASURE SOFTWARE

Assuming the 90 days horizon GungHo Online is expected to generate 1.31 times less return on investment than ASURE SOFTWARE. But when comparing it to its historical volatility, GungHo Online Entertainment is 1.49 times less risky than ASURE SOFTWARE. It trades about 0.03 of its potential returns per unit of risk. ASURE SOFTWARE is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  880.00  in ASURE SOFTWARE on October 10, 2024 and sell it today you would earn a total of  210.00  from holding ASURE SOFTWARE or generate 23.86% 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.  ASURE SOFTWARE

GungHo Online Entert

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GungHo Online Entertainment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

ASURE SOFTWARE

Risk-Adjusted Performance

14 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ASURE SOFTWARE are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, ASURE SOFTWARE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GungHo Online and ASURE SOFTWARE

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

The idea behind GungHo Online Entertainment and ASURE SOFTWARE 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.