Correlation Between LEADCORP and KB Financial
Can any of the company-specific risk be diversified away by investing in both LEADCORP 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 LEADCORP and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The LEADCORP and KB Financial Group, you can compare the effects of market volatilities on LEADCORP 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 LEADCORP with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEADCORP and KB Financial.
Diversification Opportunities for LEADCORP and KB Financial
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LEADCORP and 105560 is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding The LEADCORP 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 LEADCORP 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 The LEADCORP 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 LEADCORP i.e., LEADCORP and KB Financial go up and down completely randomly.
Pair Corralation between LEADCORP and KB Financial
Assuming the 90 days trading horizon The LEADCORP is expected to generate 0.46 times more return on investment than KB Financial. However, The LEADCORP is 2.16 times less risky than KB Financial. It trades about -0.1 of its potential returns per unit of risk. KB Financial Group is currently generating about -0.1 per unit of risk. If you would invest 417,000 in The LEADCORP on September 13, 2024 and sell it today you would lose (14,500) from holding The LEADCORP or give up 3.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
The LEADCORP vs. KB Financial Group
Performance |
| Timeline |
| LEADCORP |
| KB Financial Group |
LEADCORP and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEADCORP and KB Financial
The main advantage of trading using opposite LEADCORP and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEADCORP 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.| LEADCORP vs. KB Financial Group | LEADCORP vs. Shinhan Financial Group | LEADCORP vs. Hana Financial | LEADCORP vs. Woori Financial Group |
| KB Financial vs. Shinhan Financial Group | KB Financial vs. Hana Financial | KB Financial vs. Woori Financial Group | KB Financial vs. Samsung Electronics 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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