Correlation Between Samick Musical and FNC Entertainment
Can any of the company-specific risk be diversified away by investing in both Samick Musical and FNC Entertainment 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 Samick Musical and FNC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samick Musical Instruments and FNC Entertainment Co, you can compare the effects of market volatilities on Samick Musical and FNC Entertainment 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 Samick Musical with a short position of FNC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and FNC Entertainment.
Diversification Opportunities for Samick Musical and FNC Entertainment
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samick and FNC is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments and FNC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNC Entertainment and Samick Musical 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 Samick Musical Instruments are associated (or correlated) with FNC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNC Entertainment has no effect on the direction of Samick Musical i.e., Samick Musical and FNC Entertainment go up and down completely randomly.
Pair Corralation between Samick Musical and FNC Entertainment
Assuming the 90 days trading horizon Samick Musical Instruments is expected to generate 0.42 times more return on investment than FNC Entertainment. However, Samick Musical Instruments is 2.37 times less risky than FNC Entertainment. It trades about -0.05 of its potential returns per unit of risk. FNC Entertainment Co is currently generating about -0.02 per unit of risk. If you would invest 119,300 in Samick Musical Instruments on September 3, 2024 and sell it today you would lose (8,800) from holding Samick Musical Instruments or give up 7.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samick Musical Instruments vs. FNC Entertainment Co
Performance |
| Timeline |
| Samick Musical Instr |
| FNC Entertainment |
Samick Musical and FNC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samick Musical and FNC Entertainment
The main advantage of trading using opposite Samick Musical and FNC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical position performs unexpectedly, FNC Entertainment 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 FNC Entertainment will offset losses from the drop in FNC Entertainment's long position.| Samick Musical vs. AptaBio Therapeutics | Samick Musical vs. Daewoo SBI SPAC | Samick Musical vs. Dream Security co | Samick Musical vs. Microfriend |
| FNC Entertainment vs. Korea New Network | FNC Entertainment vs. ICD Co | FNC Entertainment vs. DYPNF CoLtd | FNC Entertainment vs. Busan Industrial Co |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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