Correlation Between FNC Entertainment and Actoz Soft
Can any of the company-specific risk be diversified away by investing in both FNC Entertainment and Actoz Soft 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 Actoz Soft 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 Actoz Soft CoLtd, you can compare the effects of market volatilities on FNC Entertainment and Actoz Soft 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 Actoz Soft. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNC Entertainment and Actoz Soft.
Diversification Opportunities for FNC Entertainment and Actoz Soft
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FNC and Actoz is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding FNC Entertainment Co and Actoz Soft CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actoz Soft CoLtd 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 Actoz Soft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actoz Soft CoLtd has no effect on the direction of FNC Entertainment i.e., FNC Entertainment and Actoz Soft go up and down completely randomly.
Pair Corralation between FNC Entertainment and Actoz Soft
Assuming the 90 days trading horizon FNC Entertainment Co is expected to under-perform the Actoz Soft. But the stock apears to be less risky and, when comparing its historical volatility, FNC Entertainment Co is 1.57 times less risky than Actoz Soft. The stock trades about -0.13 of its potential returns per unit of risk. The Actoz Soft CoLtd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 701,000 in Actoz Soft CoLtd on October 22, 2024 and sell it today you would earn a total of 19,000 from holding Actoz Soft CoLtd or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
FNC Entertainment Co vs. Actoz Soft CoLtd
Performance |
| Timeline |
| FNC Entertainment |
| Actoz Soft CoLtd |
FNC Entertainment and Actoz Soft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNC Entertainment and Actoz Soft
The main advantage of trading using opposite FNC Entertainment and Actoz Soft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNC Entertainment position performs unexpectedly, Actoz Soft 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 Actoz Soft will offset losses from the drop in Actoz Soft's long position.| FNC Entertainment vs. PJ Metal Co | FNC Entertainment vs. Korea Industrial Co | FNC Entertainment vs. Hanmi Semiconductor Co | FNC Entertainment vs. Myoung Shin Industrial |
| Actoz Soft vs. Homecast CoLtd | Actoz Soft vs. Hanshin Construction Co | Actoz Soft vs. Korean Reinsurance Co | Actoz Soft vs. SEOJEON ELECTRIC MACHINERY |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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