Correlation Between Hanwha InvestmentSecuri and FNC Entertainment
Can any of the company-specific risk be diversified away by investing in both Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri and FNC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha InvestmentSecurities Co and FNC Entertainment Co, you can compare the effects of market volatilities on Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri with a short position of FNC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha InvestmentSecuri and FNC Entertainment.
Diversification Opportunities for Hanwha InvestmentSecuri and FNC Entertainment
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanwha and FNC is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha InvestmentSecurities Co and FNC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNC Entertainment and Hanwha InvestmentSecuri 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 Hanwha InvestmentSecurities Co 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 Hanwha InvestmentSecuri i.e., Hanwha InvestmentSecuri and FNC Entertainment go up and down completely randomly.
Pair Corralation between Hanwha InvestmentSecuri and FNC Entertainment
Assuming the 90 days trading horizon Hanwha InvestmentSecurities Co is expected to generate 2.16 times more return on investment than FNC Entertainment. However, Hanwha InvestmentSecuri is 2.16 times more volatile than FNC Entertainment Co. It trades about 0.04 of its potential returns per unit of risk. FNC Entertainment Co is currently generating about -0.04 per unit of risk. If you would invest 502,319 in Hanwha InvestmentSecurities Co on August 29, 2024 and sell it today you would earn a total of 227,681 from holding Hanwha InvestmentSecurities Co or generate 45.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha InvestmentSecurities Co vs. FNC Entertainment Co
Performance |
| Timeline |
| Hanwha InvestmentSecuri |
| FNC Entertainment |
Hanwha InvestmentSecuri and FNC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha InvestmentSecuri and FNC Entertainment
The main advantage of trading using opposite Hanwha InvestmentSecuri and FNC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha InvestmentSecuri 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.| Hanwha InvestmentSecuri vs. Nh Investment And | Hanwha InvestmentSecuri vs. DSC Investment | Hanwha InvestmentSecuri vs. Busan Industrial Co | Hanwha InvestmentSecuri vs. Busan Ind |
| FNC Entertainment vs. Korea New Network | FNC Entertainment vs. Busan Industrial Co | FNC Entertainment vs. Busan Ind | FNC Entertainment vs. Shinhan WTI Futures |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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