Correlation Between Han Kook and KB Financial

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Han Kook 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 Han Kook and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Han Kook Capital and KB Financial Group, you can compare the effects of market volatilities on Han Kook 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 Han Kook with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and KB Financial.

Diversification Opportunities for Han Kook and KB Financial

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between Han and 105560 is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Capital 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 Han Kook 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 Han Kook Capital 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 Han Kook i.e., Han Kook and KB Financial go up and down completely randomly.

Pair Corralation between Han Kook and KB Financial

Assuming the 90 days trading horizon Han Kook Capital is expected to generate 0.46 times more return on investment than KB Financial. However, Han Kook Capital is 2.19 times less risky than KB Financial. It trades about -0.07 of its potential returns per unit of risk. KB Financial Group is currently generating about -0.14 per unit of risk. If you would invest  55,900  in Han Kook Capital on September 12, 2024 and sell it today you would lose (1,400) from holding Han Kook Capital or give up 2.5% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Han Kook Capital  vs.  KB Financial Group

 Performance 
       Timeline  
Han Kook Capital 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Han Kook Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Han Kook is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
KB Financial Group 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KB Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Han Kook and KB Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Han Kook and KB Financial

The main advantage of trading using opposite Han Kook and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook 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.
The idea behind Han Kook Capital and KB Financial Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Stocks Directory module to find actively traded stocks across global markets.

Other Complementary Tools

FinTech Suite
Use AI to screen and filter profitable investment opportunities
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Bonds Directory
Find actively traded corporate debentures issued by US companies