Correlation Between FNC Entertainment and Korea Zinc
Can any of the company-specific risk be diversified away by investing in both FNC Entertainment and Korea Zinc 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 FNC Entertainment and Korea Zinc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FNC Entertainment Co and Korea Zinc, you can compare the effects of market volatilities on FNC Entertainment and Korea Zinc 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 FNC Entertainment with a short position of Korea Zinc. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNC Entertainment and Korea Zinc.
Diversification Opportunities for FNC Entertainment and Korea Zinc
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between FNC and Korea is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding FNC Entertainment Co and Korea Zinc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Zinc and FNC Entertainment 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 FNC Entertainment Co are associated (or correlated) with Korea Zinc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Zinc has no effect on the direction of FNC Entertainment i.e., FNC Entertainment and Korea Zinc go up and down completely randomly.
Pair Corralation between FNC Entertainment and Korea Zinc
Assuming the 90 days trading horizon FNC Entertainment Co is expected to under-perform the Korea Zinc. In addition to that, FNC Entertainment is 1.39 times more volatile than Korea Zinc. It trades about -0.14 of its total potential returns per unit of risk. Korea Zinc is currently generating about 0.01 per unit of volatility. If you would invest 100,000,000 in Korea Zinc on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Korea Zinc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FNC Entertainment Co vs. Korea Zinc
Performance |
| Timeline |
| FNC Entertainment |
| Korea Zinc |
FNC Entertainment and Korea Zinc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNC Entertainment and Korea Zinc
The main advantage of trading using opposite FNC Entertainment and Korea Zinc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNC Entertainment position performs unexpectedly, Korea Zinc 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 Korea Zinc will offset losses from the drop in Korea Zinc's long position.| FNC Entertainment vs. AfreecaTV Co | FNC Entertainment vs. Seegene | FNC Entertainment vs. SS TECH | FNC Entertainment vs. Busan Industrial Co |
| Korea Zinc vs. Eagle Veterinary Technology | Korea Zinc vs. Pyung Hwa Industrial | Korea Zinc vs. Daiyang Metal Co | Korea Zinc vs. SS TECH |
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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