Correlation Between FNC Entertainment and Sejong Telecom
Can any of the company-specific risk be diversified away by investing in both FNC Entertainment and Sejong Telecom 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 Sejong Telecom 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 Sejong Telecom, you can compare the effects of market volatilities on FNC Entertainment and Sejong Telecom 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 Sejong Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNC Entertainment and Sejong Telecom.
Diversification Opportunities for FNC Entertainment and Sejong Telecom
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FNC and Sejong is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding FNC Entertainment Co and Sejong Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejong Telecom 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 Sejong Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejong Telecom has no effect on the direction of FNC Entertainment i.e., FNC Entertainment and Sejong Telecom go up and down completely randomly.
Pair Corralation between FNC Entertainment and Sejong Telecom
Assuming the 90 days trading horizon FNC Entertainment Co is expected to generate 2.1 times more return on investment than Sejong Telecom. However, FNC Entertainment is 2.1 times more volatile than Sejong Telecom. It trades about -0.1 of its potential returns per unit of risk. Sejong Telecom is currently generating about -0.36 per unit of risk. If you would invest 336,500 in FNC Entertainment Co on September 13, 2024 and sell it today you would lose (30,000) from holding FNC Entertainment Co or give up 8.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FNC Entertainment Co vs. Sejong Telecom
Performance |
| Timeline |
| FNC Entertainment |
| Sejong Telecom |
FNC Entertainment and Sejong Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNC Entertainment and Sejong Telecom
The main advantage of trading using opposite FNC Entertainment and Sejong Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNC Entertainment position performs unexpectedly, Sejong Telecom 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 Sejong Telecom will offset losses from the drop in Sejong Telecom's long position.| FNC Entertainment vs. YG Entertainment | FNC Entertainment vs. JYP Entertainment | FNC Entertainment vs. Cube Entertainment |
| Sejong Telecom vs. YG Entertainment | Sejong Telecom vs. JYP Entertainment | Sejong Telecom vs. Cube Entertainment | Sejong Telecom vs. FNC Entertainment 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |