Correlation Between KB Financial and Shinil Industrial
Can any of the company-specific risk be diversified away by investing in both KB Financial and Shinil Industrial 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 Shinil Industrial 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 Shinil Industrial Co, you can compare the effects of market volatilities on KB Financial and Shinil Industrial 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 Shinil Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Shinil Industrial.
Diversification Opportunities for KB Financial and Shinil Industrial
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 105560 and Shinil is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Shinil Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinil Industrial 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 Shinil Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinil Industrial has no effect on the direction of KB Financial i.e., KB Financial and Shinil Industrial go up and down completely randomly.
Pair Corralation between KB Financial and Shinil Industrial
Assuming the 90 days trading horizon KB Financial Group is expected to generate 2.23 times more return on investment than Shinil Industrial. However, KB Financial is 2.23 times more volatile than Shinil Industrial Co. It trades about 0.21 of its potential returns per unit of risk. Shinil Industrial Co is currently generating about -0.02 per unit of risk. 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Shinil Industrial Co
Performance |
| Timeline |
| KB Financial Group |
| Shinil Industrial |
KB Financial and Shinil Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Shinil Industrial
The main advantage of trading using opposite KB Financial and Shinil Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Shinil Industrial 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 Shinil Industrial will offset losses from the drop in Shinil Industrial's long position.| KB Financial vs. Samsung Electronics Co | KB Financial vs. Samsung Electronics Co | KB Financial vs. SK Hynix | KB Financial vs. HMM Co |
| Shinil Industrial vs. Solution Advanced Technology | Shinil Industrial vs. Daou Technology | Shinil Industrial vs. Global Standard Technology | Shinil Industrial vs. AeroSpace Technology of |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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