Correlation Between InfoBank and KB Financial
Can any of the company-specific risk be diversified away by investing in both InfoBank 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 InfoBank and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfoBank and KB Financial Group, you can compare the effects of market volatilities on InfoBank 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 InfoBank with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and KB Financial.
Diversification Opportunities for InfoBank and KB Financial
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InfoBank and 105560 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank 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 InfoBank 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 InfoBank 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 InfoBank i.e., InfoBank and KB Financial go up and down completely randomly.
Pair Corralation between InfoBank and KB Financial
Assuming the 90 days trading horizon InfoBank is expected to under-perform the KB Financial. In addition to that, InfoBank is 1.86 times more volatile than KB Financial Group. It trades about -0.08 of its total potential returns per unit of risk. KB Financial Group is currently generating about 0.21 per unit of volatility. If you would invest 8,500,000 in KB Financial Group on October 28, 2024 and sell it today you would earn a total of 390,000 from holding KB Financial Group or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InfoBank vs. KB Financial Group
Performance |
| Timeline |
| InfoBank |
| KB Financial Group |
InfoBank and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfoBank and KB Financial
The main advantage of trading using opposite InfoBank and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank 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.| InfoBank vs. Samsung Electronics Co | InfoBank vs. Samsung Electronics Co | InfoBank vs. SK Hynix | InfoBank vs. HMM Co |
| KB Financial vs. Samsung Electronics Co | KB Financial vs. Samsung Electronics Co | KB Financial vs. SK Hynix | KB Financial vs. HMM 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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