Correlation Between GungHo Online and SEEK

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

Diversification Opportunities for GungHo Online and SEEK

-0.68

Correlation Coefficient

GungHo Online  SEEK

Excellent diversification

The 3 months correlation between GungHo and SEEK is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment and SEEK Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEEK Limited 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 SEEK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEEK Limited has no effect on the direction of GungHo Online i.e., GungHo Online and SEEK go up and down completely randomly.

Pair Corralation between GungHo Online and SEEK

Assuming the 90 days horizon GungHo Online Entertainment is expected to under-perform the SEEK. In addition to that, GungHo Online is 1.02 times more volatile than SEEK Limited. It trades about -0.04 of its total potential returns per unit of risk. SEEK Limited is currently generating about 0.14 per unit of volatility. If you would invest  1,190  in SEEK Limited on May 8, 2025 and sell it today you would earn a total of  160.00  from holding SEEK Limited or generate 13.45% return on investment over 90 days.

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

GungHo Online Entertainment  vs.  SEEK Limited

GungHo Online Entert

Risk-Adjusted Performance

Weakest

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

SEEK Limited

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in SEEK Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SEEK reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GungHo Online and SEEK

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

The idea behind GungHo Online Entertainment and SEEK Limited 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.