Correlation Between Osang Healthcare and KB Financial
Can any of the company-specific risk be diversified away by investing in both Osang Healthcare 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 Osang Healthcare and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Osang Healthcare Co,Ltd and KB Financial Group, you can compare the effects of market volatilities on Osang Healthcare 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 Osang Healthcare with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osang Healthcare and KB Financial.
Diversification Opportunities for Osang Healthcare and KB Financial
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Osang and 105560 is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Osang Healthcare Co,Ltd 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 Osang Healthcare 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 Osang Healthcare Co,Ltd 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 Osang Healthcare i.e., Osang Healthcare and KB Financial go up and down completely randomly.
Pair Corralation between Osang Healthcare and KB Financial
Assuming the 90 days trading horizon Osang Healthcare Co,Ltd is expected to under-perform the KB Financial. In addition to that, Osang Healthcare is 1.8 times more volatile than KB Financial Group. It trades about -0.07 of its total potential returns per unit of risk. KB Financial Group is currently generating about 0.06 per unit of volatility. If you would invest 5,365,721 in KB Financial Group on October 13, 2024 and sell it today you would earn a total of 3,414,279 from holding KB Financial Group or generate 63.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 42.32% |
| Values | Daily Returns |
Osang Healthcare Co,Ltd vs. KB Financial Group
Performance |
| Timeline |
| Osang Healthcare Co,Ltd |
| KB Financial Group |
Osang Healthcare and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Osang Healthcare and KB Financial
The main advantage of trading using opposite Osang Healthcare and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osang Healthcare 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.| Osang Healthcare vs. GS Retail Co | Osang Healthcare vs. LG Household Healthcare | Osang Healthcare vs. Daishin Information Communications | Osang Healthcare vs. CKH Food Health |
| KB Financial vs. Hotel Shilla Co | KB Financial vs. Shinsegae Food | KB Financial vs. Lotte Non Life Insurance | KB Financial vs. PLAYWITH |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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