Correlation Between Hansol Chemica and KB Financial
Can any of the company-specific risk be diversified away by investing in both Hansol Chemica 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 Hansol Chemica and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansol Chemica and KB Financial Group, you can compare the effects of market volatilities on Hansol Chemica 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 Hansol Chemica with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansol Chemica and KB Financial.
Diversification Opportunities for Hansol Chemica and KB Financial
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hansol and 105560 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Chemica 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 Hansol Chemica 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 Hansol Chemica 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 Hansol Chemica i.e., Hansol Chemica and KB Financial go up and down completely randomly.
Pair Corralation between Hansol Chemica and KB Financial
Assuming the 90 days trading horizon Hansol Chemica is expected to under-perform the KB Financial. In addition to that, Hansol Chemica is 1.17 times more volatile than KB Financial Group. It trades about -0.05 of its total potential returns per unit of risk. KB Financial Group is currently generating about 0.08 per unit of volatility. If you would invest 4,971,318 in KB Financial Group on September 1, 2024 and sell it today you would earn a total of 4,648,682 from holding KB Financial Group or generate 93.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.77% |
| Values | Daily Returns |
Hansol Chemica vs. KB Financial Group
Performance |
| Timeline |
| Hansol Chemica |
| KB Financial Group |
Hansol Chemica and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansol Chemica and KB Financial
The main advantage of trading using opposite Hansol Chemica and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansol Chemica 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.| Hansol Chemica vs. Display Tech Co | Hansol Chemica vs. LG Display Co | Hansol Chemica vs. Inzi Display CoLtd | Hansol Chemica vs. Eagle Veterinary Technology |
| KB Financial vs. Korea Information Engineering | KB Financial vs. SCI Information Service | KB Financial vs. Atinum Investment Co | KB Financial vs. Samyung Trading 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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