Correlation Between FNC Entertainment and MetaLabs
Can any of the company-specific risk be diversified away by investing in both FNC Entertainment and MetaLabs 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 MetaLabs 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 MetaLabs Co, you can compare the effects of market volatilities on FNC Entertainment and MetaLabs 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 MetaLabs. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNC Entertainment and MetaLabs.
Diversification Opportunities for FNC Entertainment and MetaLabs
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FNC and MetaLabs is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding FNC Entertainment Co and MetaLabs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaLabs 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 MetaLabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetaLabs has no effect on the direction of FNC Entertainment i.e., FNC Entertainment and MetaLabs go up and down completely randomly.
Pair Corralation between FNC Entertainment and MetaLabs
Assuming the 90 days trading horizon FNC Entertainment Co is expected to under-perform the MetaLabs. But the stock apears to be less risky and, when comparing its historical volatility, FNC Entertainment Co is 1.63 times less risky than MetaLabs. The stock trades about -0.04 of its potential returns per unit of risk. The MetaLabs Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 248,500 in MetaLabs Co on September 3, 2024 and sell it today you would lose (116,000) from holding MetaLabs Co or give up 46.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FNC Entertainment Co vs. MetaLabs Co
Performance |
| Timeline |
| FNC Entertainment |
| MetaLabs |
FNC Entertainment and MetaLabs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNC Entertainment and MetaLabs
The main advantage of trading using opposite FNC Entertainment and MetaLabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNC Entertainment position performs unexpectedly, MetaLabs 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 MetaLabs will offset losses from the drop in MetaLabs' long position.| FNC Entertainment vs. Korea New Network | FNC Entertainment vs. ICD Co | FNC Entertainment vs. DYPNF CoLtd | FNC Entertainment vs. Busan Industrial Co |
| MetaLabs vs. Korea Real Estate | MetaLabs vs. Busan Industrial Co | MetaLabs vs. UNISEM Co | MetaLabs vs. RPBio Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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