Correlation Between Nable Communications and FNC Entertainment
Can any of the company-specific risk be diversified away by investing in both Nable Communications 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 Nable Communications and FNC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nable Communications and FNC Entertainment Co, you can compare the effects of market volatilities on Nable Communications 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 Nable Communications with a short position of FNC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nable Communications and FNC Entertainment.
Diversification Opportunities for Nable Communications and FNC Entertainment
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nable and FNC is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nable Communications and FNC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNC Entertainment and Nable Communications 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 Nable Communications 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 Nable Communications i.e., Nable Communications and FNC Entertainment go up and down completely randomly.
Pair Corralation between Nable Communications and FNC Entertainment
Assuming the 90 days trading horizon Nable Communications is expected to generate 1.03 times more return on investment than FNC Entertainment. However, Nable Communications is 1.03 times more volatile than FNC Entertainment Co. It trades about -0.19 of its potential returns per unit of risk. FNC Entertainment Co is currently generating about -0.24 per unit of risk. If you would invest 692,000 in Nable Communications on October 14, 2024 and sell it today you would lose (44,000) from holding Nable Communications or give up 6.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nable Communications vs. FNC Entertainment Co
Performance |
| Timeline |
| Nable Communications |
| FNC Entertainment |
Nable Communications and FNC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nable Communications and FNC Entertainment
The main advantage of trading using opposite Nable Communications and FNC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nable Communications 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.| Nable Communications vs. Seohee Construction Co | Nable Communications vs. Seoul Electronics Telecom | Nable Communications vs. Korea Electronic Certification | Nable Communications vs. Cuckoo Electronics Co |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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