Correlation Between FNC Entertainment and Korea New
Can any of the company-specific risk be diversified away by investing in both FNC Entertainment and Korea New 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 Korea New 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 Korea New Network, you can compare the effects of market volatilities on FNC Entertainment and Korea New 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 Korea New. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNC Entertainment and Korea New.
Diversification Opportunities for FNC Entertainment and Korea New
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FNC and Korea is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding FNC Entertainment Co and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network 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 Korea New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of FNC Entertainment i.e., FNC Entertainment and Korea New go up and down completely randomly.
Pair Corralation between FNC Entertainment and Korea New
Assuming the 90 days trading horizon FNC Entertainment Co is expected to under-perform the Korea New. In addition to that, FNC Entertainment is 1.52 times more volatile than Korea New Network. It trades about -0.16 of its total potential returns per unit of risk. Korea New Network is currently generating about -0.04 per unit of volatility. If you would invest 80,000 in Korea New Network on August 29, 2024 and sell it today you would lose (1,900) from holding Korea New Network or give up 2.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FNC Entertainment Co vs. Korea New Network
Performance |
| Timeline |
| FNC Entertainment |
| Korea New Network |
FNC Entertainment and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNC Entertainment and Korea New
The main advantage of trading using opposite FNC Entertainment and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNC Entertainment position performs unexpectedly, Korea New 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 Korea New will offset losses from the drop in Korea New's long position.| FNC Entertainment vs. Korea New Network | FNC Entertainment vs. Busan Industrial Co | FNC Entertainment vs. Busan Ind | FNC Entertainment vs. Shinhan WTI Futures |
| Korea New vs. Hyundai Engineering Plastics | Korea New vs. Dongwon Metal Co | Korea New vs. Taeyang Metal Industrial | Korea New vs. LS Materials |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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