Correlation Between FNC Entertainment and TPC Mechatronics
Can any of the company-specific risk be diversified away by investing in both FNC Entertainment and TPC Mechatronics 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 TPC Mechatronics 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 TPC Mechatronics, you can compare the effects of market volatilities on FNC Entertainment and TPC Mechatronics 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 TPC Mechatronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNC Entertainment and TPC Mechatronics.
Diversification Opportunities for FNC Entertainment and TPC Mechatronics
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between FNC and TPC is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding FNC Entertainment Co and TPC Mechatronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPC Mechatronics 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 TPC Mechatronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPC Mechatronics has no effect on the direction of FNC Entertainment i.e., FNC Entertainment and TPC Mechatronics go up and down completely randomly.
Pair Corralation between FNC Entertainment and TPC Mechatronics
Assuming the 90 days trading horizon FNC Entertainment Co is expected to under-perform the TPC Mechatronics. But the stock apears to be less risky and, when comparing its historical volatility, FNC Entertainment Co is 1.61 times less risky than TPC Mechatronics. The stock trades about -0.04 of its potential returns per unit of risk. The TPC Mechatronics is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 337,774 in TPC Mechatronics on September 2, 2024 and sell it today you would lose (119,774) from holding TPC Mechatronics or give up 35.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FNC Entertainment Co vs. TPC Mechatronics
Performance |
| Timeline |
| FNC Entertainment |
| TPC Mechatronics |
FNC Entertainment and TPC Mechatronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNC Entertainment and TPC Mechatronics
The main advantage of trading using opposite FNC Entertainment and TPC Mechatronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNC Entertainment position performs unexpectedly, TPC Mechatronics 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 TPC Mechatronics will offset losses from the drop in TPC Mechatronics' long position.| FNC Entertainment vs. AfreecaTV Co | FNC Entertainment vs. Seegene | FNC Entertainment vs. SS TECH | FNC Entertainment vs. Busan Industrial Co |
| TPC Mechatronics vs. Korea New Network | TPC Mechatronics vs. ICD Co | TPC Mechatronics vs. DYPNF CoLtd | TPC Mechatronics vs. Busan 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |