Correlation Between SCI Information and KB Financial
Can any of the company-specific risk be diversified away by investing in both SCI Information 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 SCI Information and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCI Information Service and KB Financial Group, you can compare the effects of market volatilities on SCI Information 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 SCI Information with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Information and KB Financial.
Diversification Opportunities for SCI Information and KB Financial
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SCI and 105560 is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service 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 SCI Information 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 SCI Information Service 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 SCI Information i.e., SCI Information and KB Financial go up and down completely randomly.
Pair Corralation between SCI Information and KB Financial
Assuming the 90 days trading horizon SCI Information Service is expected to under-perform the KB Financial. In addition to that, SCI Information is 1.2 times more volatile than KB Financial Group. It trades about -0.17 of its total potential returns per unit of risk. KB Financial Group is currently generating about 0.0 per unit of volatility. If you would invest 9,620,000 in KB Financial Group on August 29, 2024 and sell it today you would lose (20,000) from holding KB Financial Group or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCI Information Service vs. KB Financial Group
Performance |
| Timeline |
| SCI Information Service |
| KB Financial Group |
SCI Information and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Information and KB Financial
The main advantage of trading using opposite SCI Information and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Information 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.| SCI Information vs. Korea New Network | SCI Information vs. Dong A Eltek | SCI Information vs. Dreamus Company | SCI Information vs. SK Bioscience Co |
| KB Financial vs. Korea New Network | KB Financial vs. Dong A Eltek | KB Financial vs. Dreamus Company | KB Financial vs. SK Bioscience 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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