Correlation Between Kyeryong Construction and KB Financial
Can any of the company-specific risk be diversified away by investing in both Kyeryong Construction 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 Kyeryong Construction and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyeryong Construction Industrial and KB Financial Group, you can compare the effects of market volatilities on Kyeryong Construction 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 Kyeryong Construction with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyeryong Construction and KB Financial.
Diversification Opportunities for Kyeryong Construction and KB Financial
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kyeryong and 105560 is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kyeryong Construction Industri 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 Kyeryong Construction 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 Kyeryong Construction Industrial 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 Kyeryong Construction i.e., Kyeryong Construction and KB Financial go up and down completely randomly.
Pair Corralation between Kyeryong Construction and KB Financial
Assuming the 90 days trading horizon Kyeryong Construction Industrial is expected to generate 0.51 times more return on investment than KB Financial. However, Kyeryong Construction Industrial is 1.95 times less risky than KB Financial. It trades about 0.12 of its potential returns per unit of risk. KB Financial Group is currently generating about -0.06 per unit of risk. If you would invest 1,259,000 in Kyeryong Construction Industrial on September 15, 2024 and sell it today you would earn a total of 51,000 from holding Kyeryong Construction Industrial or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyeryong Construction Industri vs. KB Financial Group
Performance |
| Timeline |
| Kyeryong Construction |
| KB Financial Group |
Kyeryong Construction and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyeryong Construction and KB Financial
The main advantage of trading using opposite Kyeryong Construction and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyeryong Construction 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.| Kyeryong Construction vs. Samsung Electronics Co | Kyeryong Construction vs. Samsung Electronics Co | Kyeryong Construction vs. SK Hynix | Kyeryong Construction vs. POSCO Holdings |
| KB Financial vs. Dongil Metal Co | KB Financial vs. Shinsegae Engineering Construction | KB Financial vs. Seoam Machinery Industry | KB Financial vs. Kyeryong Construction Industrial |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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