Correlation Between FNC Entertainment and Busan Ind
Can any of the company-specific risk be diversified away by investing in both FNC Entertainment and Busan Ind 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 Busan Ind 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 Busan Ind, you can compare the effects of market volatilities on FNC Entertainment and Busan Ind 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 Busan Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNC Entertainment and Busan Ind.
Diversification Opportunities for FNC Entertainment and Busan Ind
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between FNC and Busan is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding FNC Entertainment Co and Busan Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Ind 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 Busan Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Busan Ind has no effect on the direction of FNC Entertainment i.e., FNC Entertainment and Busan Ind go up and down completely randomly.
Pair Corralation between FNC Entertainment and Busan Ind
Assuming the 90 days trading horizon FNC Entertainment Co is expected to under-perform the Busan Ind. But the stock apears to be less risky and, when comparing its historical volatility, FNC Entertainment Co is 1.97 times less risky than Busan Ind. The stock trades about -0.24 of its potential returns per unit of risk. The Busan Ind is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,280,000 in Busan Ind on August 27, 2024 and sell it today you would earn a total of 220,000 from holding Busan Ind or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FNC Entertainment Co vs. Busan Ind
Performance |
| Timeline |
| FNC Entertainment |
| Busan Ind |
FNC Entertainment and Busan Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNC Entertainment and Busan Ind
The main advantage of trading using opposite FNC Entertainment and Busan Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNC Entertainment position performs unexpectedly, Busan Ind 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 Busan Ind will offset losses from the drop in Busan Ind's long position.| FNC Entertainment vs. AfreecaTV Co | FNC Entertainment vs. SS TECH | FNC Entertainment vs. Busan Industrial Co | FNC Entertainment vs. Busan Ind |
| Busan Ind vs. Jinro Distillers Co | Busan Ind vs. Sam Yang Foods | Busan Ind vs. Daelim Industrial Co | Busan Ind vs. Haesung Industrial Co |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |