Correlation Between FNC Entertainment and Sang A
Can any of the company-specific risk be diversified away by investing in both FNC Entertainment and Sang A 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 Sang A 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 Sang A Frontec CoLtd, you can compare the effects of market volatilities on FNC Entertainment and Sang A 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 Sang A. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNC Entertainment and Sang A.
Diversification Opportunities for FNC Entertainment and Sang A
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FNC and Sang is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding FNC Entertainment Co and Sang A Frontec CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sang A Frontec 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 Sang A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sang A Frontec has no effect on the direction of FNC Entertainment i.e., FNC Entertainment and Sang A go up and down completely randomly.
Pair Corralation between FNC Entertainment and Sang A
Assuming the 90 days trading horizon FNC Entertainment Co is expected to under-perform the Sang A. But the stock apears to be less risky and, when comparing its historical volatility, FNC Entertainment Co is 1.23 times less risky than Sang A. The stock trades about -0.06 of its potential returns per unit of risk. The Sang A Frontec CoLtd is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,210,000 in Sang A Frontec CoLtd on October 14, 2024 and sell it today you would lose (341,000) from holding Sang A Frontec CoLtd or give up 15.43% 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. Sang A Frontec CoLtd
Performance |
| Timeline |
| FNC Entertainment |
| Sang A Frontec |
FNC Entertainment and Sang A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNC Entertainment and Sang A
The main advantage of trading using opposite FNC Entertainment and Sang A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNC Entertainment position performs unexpectedly, Sang A 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 Sang A will offset losses from the drop in Sang A's long position.| FNC Entertainment vs. Nable Communications | FNC Entertainment vs. Digital Power Communications | FNC Entertainment vs. Wireless Power Amplifier | FNC Entertainment vs. Lotte Non Life Insurance |
| Sang A vs. MediaZen | Sang A vs. Pan Entertainment Co | Sang A vs. SAMG Entertainment Co | Sang A vs. Lotte Data Communication |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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