Correlation Between Hanjin Transportation and KB Financial
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and KB Financial 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 Hanjin Transportation and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjin Transportation Co and KB Financial Group, you can compare the effects of market volatilities on Hanjin Transportation and KB Financial 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 Hanjin Transportation with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and KB Financial.
Diversification Opportunities for Hanjin Transportation and KB Financial
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanjin and 105560 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and KB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB Financial Group and Hanjin Transportation 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 Hanjin Transportation Co are associated (or correlated) with KB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB Financial Group has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and KB Financial go up and down completely randomly.
Pair Corralation between Hanjin Transportation and KB Financial
Assuming the 90 days trading horizon Hanjin Transportation is expected to generate 3.45 times less return on investment than KB Financial. But when comparing it to its historical volatility, Hanjin Transportation Co is 1.93 times less risky than KB Financial. It trades about 0.22 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 8,290,000 in KB Financial Group on October 29, 2024 and sell it today you would earn a total of 600,000 from holding KB Financial Group or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. KB Financial Group
Performance |
| Timeline |
| Hanjin Transportation |
| KB Financial Group |
Hanjin Transportation and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and KB Financial
The main advantage of trading using opposite Hanjin Transportation and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, KB Financial 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 KB Financial will offset losses from the drop in KB Financial's long position.| Hanjin Transportation vs. Koryo Credit Information | Hanjin Transportation vs. SV Investment | Hanjin Transportation vs. Leaders Technology Investment | Hanjin Transportation vs. Insung Information Co |
| KB Financial vs. Iljin Display | KB Financial vs. Korea Steel Co | KB Financial vs. Fine Besteel Co | KB Financial vs. Daesung Industrial Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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