Correlation Between Pungguk Ethanol and KB Financial
Can any of the company-specific risk be diversified away by investing in both Pungguk Ethanol 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 Pungguk Ethanol and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pungguk Ethanol Industrial and KB Financial Group, you can compare the effects of market volatilities on Pungguk Ethanol 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 Pungguk Ethanol with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pungguk Ethanol and KB Financial.
Diversification Opportunities for Pungguk Ethanol and KB Financial
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pungguk and 105560 is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Pungguk Ethanol Industrial 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 Pungguk Ethanol 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 Pungguk Ethanol 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 Pungguk Ethanol i.e., Pungguk Ethanol and KB Financial go up and down completely randomly.
Pair Corralation between Pungguk Ethanol and KB Financial
Assuming the 90 days trading horizon Pungguk Ethanol Industrial is expected to under-perform the KB Financial. But the stock apears to be less risky and, when comparing its historical volatility, Pungguk Ethanol Industrial is 3.94 times less risky than KB Financial. The stock trades about -0.18 of its potential returns per unit of risk. The KB Financial Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 8,260,000 in KB Financial Group on September 4, 2024 and sell it today you would earn a total of 1,380,000 from holding KB Financial Group or generate 16.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pungguk Ethanol Industrial vs. KB Financial Group
Performance |
| Timeline |
| Pungguk Ethanol Indu |
| KB Financial Group |
Pungguk Ethanol and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pungguk Ethanol and KB Financial
The main advantage of trading using opposite Pungguk Ethanol and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pungguk Ethanol 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.| Pungguk Ethanol vs. Tae Kyung Chemical | Pungguk Ethanol vs. Kukdong Oil Chemicals | Pungguk Ethanol vs. Miwon Chemical | Pungguk Ethanol vs. Daehan Synthetic Fiber |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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