Correlation Between GungHo Online and MCEWEN MINING

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

Diversification Opportunities for GungHo Online and MCEWEN MINING

-0.75
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between GungHo and MCEWEN is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and MCEWEN MINING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEWEN MINING INC 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 MCEWEN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCEWEN MINING INC has no effect on the direction of GungHo Online i.e., GungHo Online and MCEWEN MINING go up and down completely randomly.

Pair Corralation between GungHo Online and MCEWEN MINING

Assuming the 90 days horizon GungHo Online Entertainment is expected to under-perform the MCEWEN MINING. But the stock apears to be less risky and, when comparing its historical volatility, GungHo Online Entertainment is 2.33 times less risky than MCEWEN MINING. The stock trades about -0.11 of its potential returns per unit of risk. The MCEWEN MINING INC is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  695.00  in MCEWEN MINING INC on April 22, 2025 and sell it today you would earn a total of  255.00  from holding MCEWEN MINING INC or generate 36.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

GungHo Online Entertainment  vs.  MCEWEN MINING INC

 Performance 
       Timeline  
GungHo Online Entert 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days GungHo Online Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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.
MCEWEN MINING INC 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in MCEWEN MINING INC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, MCEWEN MINING reported solid returns over the last few months and may actually be approaching a breakup point.

GungHo Online and MCEWEN MINING Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GungHo Online and MCEWEN MINING

The main advantage of trading using opposite GungHo Online and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online position performs unexpectedly, MCEWEN MINING 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 MCEWEN MINING will offset losses from the drop in MCEWEN MINING's long position.
The idea behind GungHo Online Entertainment and MCEWEN MINING INC 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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