Correlation Between FNC Entertainment and LG Uplus
Can any of the company-specific risk be diversified away by investing in both FNC Entertainment and LG Uplus 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 LG Uplus 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 LG Uplus, you can compare the effects of market volatilities on FNC Entertainment and LG Uplus 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 LG Uplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNC Entertainment and LG Uplus.
Diversification Opportunities for FNC Entertainment and LG Uplus
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FNC and 032640 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding FNC Entertainment Co and LG Uplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Uplus 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 LG Uplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Uplus has no effect on the direction of FNC Entertainment i.e., FNC Entertainment and LG Uplus go up and down completely randomly.
Pair Corralation between FNC Entertainment and LG Uplus
Assuming the 90 days trading horizon FNC Entertainment Co is expected to under-perform the LG Uplus. In addition to that, FNC Entertainment is 2.01 times more volatile than LG Uplus. It trades about 0.0 of its total potential returns per unit of risk. LG Uplus is currently generating about 0.05 per unit of volatility. If you would invest 989,000 in LG Uplus on December 4, 2024 and sell it today you would earn a total of 69,000 from holding LG Uplus or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FNC Entertainment Co vs. LG Uplus
Performance |
| Timeline |
| FNC Entertainment |
| LG Uplus |
FNC Entertainment and LG Uplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNC Entertainment and LG Uplus
The main advantage of trading using opposite FNC Entertainment and LG Uplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNC Entertainment position performs unexpectedly, LG Uplus 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 LG Uplus will offset losses from the drop in LG Uplus' long position.| FNC Entertainment vs. CJ Seafood Corp | FNC Entertainment vs. Seoul Semiconductor Co | FNC Entertainment vs. Hankukpackage Co | FNC Entertainment vs. Wing Yip Food |
| LG Uplus vs. Daou Data Corp | LG Uplus vs. Daishin Information Communications | LG Uplus vs. KG Eco Technology | LG Uplus vs. Daou Technology |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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