Correlation Between PLAYWITH and FNC Entertainment
Can any of the company-specific risk be diversified away by investing in both PLAYWITH 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 PLAYWITH and FNC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYWITH and FNC Entertainment Co, you can compare the effects of market volatilities on PLAYWITH 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 PLAYWITH with a short position of FNC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYWITH and FNC Entertainment.
Diversification Opportunities for PLAYWITH and FNC Entertainment
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PLAYWITH and FNC is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding PLAYWITH and FNC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNC Entertainment and PLAYWITH 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 PLAYWITH 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 PLAYWITH i.e., PLAYWITH and FNC Entertainment go up and down completely randomly.
Pair Corralation between PLAYWITH and FNC Entertainment
Assuming the 90 days trading horizon PLAYWITH is expected to under-perform the FNC Entertainment. In addition to that, PLAYWITH is 1.11 times more volatile than FNC Entertainment Co. It trades about -0.22 of its total potential returns per unit of risk. FNC Entertainment Co is currently generating about -0.17 per unit of volatility. If you would invest 368,000 in FNC Entertainment Co on October 14, 2024 and sell it today you would lose (86,000) from holding FNC Entertainment Co or give up 23.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYWITH vs. FNC Entertainment Co
Performance |
| Timeline |
| PLAYWITH |
| FNC Entertainment |
PLAYWITH and FNC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYWITH and FNC Entertainment
The main advantage of trading using opposite PLAYWITH and FNC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYWITH 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.| PLAYWITH vs. Handok Clean Tech | PLAYWITH vs. DB Financial Investment | PLAYWITH vs. Woori Financial Group | PLAYWITH vs. SCI Information Service |
| FNC Entertainment vs. Sangsin Energy Display | FNC Entertainment vs. Digital Power Communications | FNC Entertainment vs. Inzi Display CoLtd | FNC Entertainment vs. PLAYWITH |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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