Correlation Between FNC Entertainment and Pan Entertainment
Can any of the company-specific risk be diversified away by investing in both FNC Entertainment and Pan Entertainment 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 Pan Entertainment 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 Pan Entertainment Co, you can compare the effects of market volatilities on FNC Entertainment and Pan Entertainment 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 Pan Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNC Entertainment and Pan Entertainment.
Diversification Opportunities for FNC Entertainment and Pan Entertainment
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FNC and Pan is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding FNC Entertainment Co and Pan Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Entertainment 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 Pan Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Entertainment has no effect on the direction of FNC Entertainment i.e., FNC Entertainment and Pan Entertainment go up and down completely randomly.
Pair Corralation between FNC Entertainment and Pan Entertainment
Assuming the 90 days trading horizon FNC Entertainment Co is expected to under-perform the Pan Entertainment. In addition to that, FNC Entertainment is 2.41 times more volatile than Pan Entertainment Co. It trades about -0.16 of its total potential returns per unit of risk. Pan Entertainment Co is currently generating about -0.21 per unit of volatility. If you would invest 217,000 in Pan Entertainment Co on August 29, 2024 and sell it today you would lose (12,500) from holding Pan Entertainment Co or give up 5.76% 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. Pan Entertainment Co
Performance |
| Timeline |
| FNC Entertainment |
| Pan Entertainment |
FNC Entertainment and Pan Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNC Entertainment and Pan Entertainment
The main advantage of trading using opposite FNC Entertainment and Pan Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNC Entertainment position performs unexpectedly, Pan Entertainment 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 Pan Entertainment will offset losses from the drop in Pan Entertainment's long position.| FNC Entertainment vs. AfreecaTV Co | FNC Entertainment vs. SS TECH | FNC Entertainment vs. Busan Industrial Co | FNC Entertainment vs. Busan Ind |
| Pan Entertainment vs. AfreecaTV Co | Pan Entertainment vs. SS TECH | Pan Entertainment vs. Busan Industrial Co | Pan Entertainment vs. Busan Ind |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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