Correlation Between Korea New and FNC Entertainment
Can any of the company-specific risk be diversified away by investing in both Korea New 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 Korea New and FNC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea New Network and FNC Entertainment Co, you can compare the effects of market volatilities on Korea New 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 Korea New with a short position of FNC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and FNC Entertainment.
Diversification Opportunities for Korea New and FNC Entertainment
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and FNC is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and FNC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNC Entertainment and Korea New 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 Korea New Network 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 Korea New i.e., Korea New and FNC Entertainment go up and down completely randomly.
Pair Corralation between Korea New and FNC Entertainment
Assuming the 90 days trading horizon Korea New Network is expected to generate 0.94 times more return on investment than FNC Entertainment. However, Korea New Network is 1.06 times less risky than FNC Entertainment. It trades about 0.0 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 89,861 in Korea New Network on November 27, 2024 and sell it today you would lose (8,861) from holding Korea New Network or give up 9.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea New Network vs. FNC Entertainment Co
Performance |
| Timeline |
| Korea New Network |
| FNC Entertainment |
Korea New and FNC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and FNC Entertainment
The main advantage of trading using opposite Korea New and FNC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New 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.| Korea New vs. Tae Kyung Chemical | Korea New vs. Jin Air Co | Korea New vs. Korea Air Svc | Korea New vs. SK Chemicals Co |
| FNC Entertainment vs. Inzi Display CoLtd | FNC Entertainment vs. KakaoBank Corp | FNC Entertainment vs. Koryo Credit Information | FNC Entertainment vs. Incar Financial Service |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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