Correlation Between KB Financial and Lotte Non
Can any of the company-specific risk be diversified away by investing in both KB Financial and Lotte Non 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 KB Financial and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KB Financial Group and Lotte Non Life, you can compare the effects of market volatilities on KB Financial and Lotte Non 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 KB Financial with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Lotte Non.
Diversification Opportunities for KB Financial and Lotte Non
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 105560 and Lotte is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Lotte Non Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Non Life and KB Financial 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 KB Financial Group are associated (or correlated) with Lotte Non. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Non Life has no effect on the direction of KB Financial i.e., KB Financial and Lotte Non go up and down completely randomly.
Pair Corralation between KB Financial and Lotte Non
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.14 times more return on investment than Lotte Non. However, KB Financial is 1.14 times more volatile than Lotte Non Life. It trades about 0.08 of its potential returns per unit of risk. Lotte Non Life is currently generating about -0.2 per unit of risk. If you would invest 8,604,919 in KB Financial Group on August 29, 2024 and sell it today you would earn a total of 995,081 from holding KB Financial Group or generate 11.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Lotte Non Life
Performance |
| Timeline |
| KB Financial Group |
| Lotte Non Life |
KB Financial and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Lotte Non
The main advantage of trading using opposite KB Financial and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Lotte Non 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 Lotte Non will offset losses from the drop in Lotte Non's long position.| KB Financial vs. Cube Entertainment | KB Financial vs. Dreamus Company | KB Financial vs. LG Energy Solution | KB Financial vs. Dongwon System |
| Lotte Non vs. Daou Data Corp | Lotte Non vs. Alton Sports CoLtd | Lotte Non vs. Display Tech Co | Lotte Non vs. Sangsin Energy Display |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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