Correlation Between Asia Technology and FNC Entertainment
Can any of the company-specific risk be diversified away by investing in both Asia Technology 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 Asia Technology and FNC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Technology Co and FNC Entertainment Co, you can compare the effects of market volatilities on Asia Technology 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 Asia Technology with a short position of FNC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Technology and FNC Entertainment.
Diversification Opportunities for Asia Technology and FNC Entertainment
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asia and FNC is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Asia Technology 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 Asia Technology 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 Asia Technology 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 Asia Technology i.e., Asia Technology and FNC Entertainment go up and down completely randomly.
Pair Corralation between Asia Technology and FNC Entertainment
Assuming the 90 days trading horizon Asia Technology Co is expected to generate 0.71 times more return on investment than FNC Entertainment. However, Asia Technology Co is 1.42 times less risky than FNC Entertainment. It trades about 0.02 of its potential returns per unit of risk. FNC Entertainment Co is currently generating about -0.14 per unit of risk. If you would invest 223,000 in Asia Technology Co on September 1, 2024 and sell it today you would earn a total of 1,500 from holding Asia Technology Co or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Technology Co vs. FNC Entertainment Co
Performance |
| Timeline |
| Asia Technology |
| FNC Entertainment |
Asia Technology and FNC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Technology and FNC Entertainment
The main advantage of trading using opposite Asia Technology and FNC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Technology 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.| Asia Technology vs. Korea New Network | Asia Technology vs. ICD Co | Asia Technology vs. DYPNF CoLtd | Asia Technology vs. Busan Industrial Co |
| FNC Entertainment vs. AurosTechnology | FNC Entertainment vs. Amogreentech Co | FNC Entertainment vs. TJ media Co | FNC Entertainment vs. Raontech |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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