Correlation Between Histeel and FNC Entertainment
Can any of the company-specific risk be diversified away by investing in both Histeel and FNC 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 Histeel and FNC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Histeel and FNC Entertainment Co, you can compare the effects of market volatilities on Histeel and FNC 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 Histeel with a short position of FNC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Histeel and FNC Entertainment.
Diversification Opportunities for Histeel and FNC Entertainment
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Histeel and FNC is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Histeel and FNC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNC Entertainment and Histeel 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 Histeel are associated (or correlated) with FNC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNC Entertainment has no effect on the direction of Histeel i.e., Histeel and FNC Entertainment go up and down completely randomly.
Pair Corralation between Histeel and FNC Entertainment
Assuming the 90 days trading horizon Histeel is expected to generate 1.38 times more return on investment than FNC Entertainment. However, Histeel is 1.38 times more volatile than FNC Entertainment Co. It trades about -0.05 of its potential returns per unit of risk. FNC Entertainment Co is currently generating about -0.09 per unit of risk. If you would invest 310,500 in Histeel on September 12, 2024 and sell it today you would lose (41,000) from holding Histeel or give up 13.2% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Histeel vs. FNC Entertainment Co
Performance |
Timeline |
Histeel |
FNC Entertainment |
Histeel and FNC Entertainment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Histeel and FNC Entertainment
The main advantage of trading using opposite Histeel and FNC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Histeel position performs unexpectedly, FNC 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 FNC Entertainment will offset losses from the drop in FNC Entertainment's long position.Histeel vs. LG Chemicals | Histeel vs. POSCO Holdings | Histeel vs. Hanwha Solutions | Histeel vs. Lotte Chemical Corp |
FNC Entertainment vs. YG Entertainment | FNC Entertainment vs. JYP Entertainment | FNC Entertainment vs. Cube Entertainment |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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