Correlation Between Dongjin Semichem and KB Financial
Can any of the company-specific risk be diversified away by investing in both Dongjin Semichem 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 Dongjin Semichem and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongjin Semichem Co and KB Financial Group, you can compare the effects of market volatilities on Dongjin Semichem 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 Dongjin Semichem with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongjin Semichem and KB Financial.
Diversification Opportunities for Dongjin Semichem and KB Financial
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dongjin and 105560 is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dongjin Semichem 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 Dongjin Semichem 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 Dongjin Semichem 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 Dongjin Semichem i.e., Dongjin Semichem and KB Financial go up and down completely randomly.
Pair Corralation between Dongjin Semichem and KB Financial
Assuming the 90 days trading horizon Dongjin Semichem Co is expected to under-perform the KB Financial. In addition to that, Dongjin Semichem is 1.77 times more volatile than KB Financial Group. It trades about -0.3 of its total potential returns per unit of risk. KB Financial Group is currently generating about 0.26 per unit of volatility. If you would invest 9,070,000 in KB Financial Group on September 4, 2024 and sell it today you would earn a total of 1,050,000 from holding KB Financial Group or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongjin Semichem Co vs. KB Financial Group
Performance |
| Timeline |
| Dongjin Semichem |
| KB Financial Group |
Dongjin Semichem and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongjin Semichem and KB Financial
The main advantage of trading using opposite Dongjin Semichem and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongjin Semichem 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.| Dongjin Semichem vs. LG Chemicals | Dongjin Semichem vs. POSCO Holdings | Dongjin Semichem vs. Lotte Chemical Corp | Dongjin Semichem vs. Hyundai Steel |
| KB Financial vs. Dongjin Semichem Co | KB Financial vs. AhnLab Inc | KB Financial vs. Posco ICT | KB Financial vs. CJ ENM |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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