Correlation Between Eagon Industrial and KB Financial
Can any of the company-specific risk be diversified away by investing in both Eagon Industrial 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 Eagon Industrial and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagon Industrial Co and KB Financial Group, you can compare the effects of market volatilities on Eagon Industrial 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 Eagon Industrial with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagon Industrial and KB Financial.
Diversification Opportunities for Eagon Industrial and KB Financial
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eagon and 105560 is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Eagon Industrial 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 Eagon Industrial 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 Eagon Industrial 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 Eagon Industrial i.e., Eagon Industrial and KB Financial go up and down completely randomly.
Pair Corralation between Eagon Industrial and KB Financial
Assuming the 90 days trading horizon Eagon Industrial Co is expected to under-perform the KB Financial. But the stock apears to be less risky and, when comparing its historical volatility, Eagon Industrial Co is 1.36 times less risky than KB Financial. The stock trades about -0.05 of its potential returns per unit of risk. The KB Financial Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,715,468 in KB Financial Group on September 4, 2024 and sell it today you would earn a total of 4,924,532 from holding KB Financial Group or generate 104.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagon Industrial Co vs. KB Financial Group
Performance |
| Timeline |
| Eagon Industrial |
| KB Financial Group |
Eagon Industrial and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagon Industrial and KB Financial
The main advantage of trading using opposite Eagon Industrial and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagon Industrial 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.| Eagon Industrial vs. Dongbu Insurance Co | Eagon Industrial vs. BNK Financial Group | Eagon Industrial vs. Korean Reinsurance Co | Eagon Industrial vs. Daewoo Engineering Construction |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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