Correlation Between KB Financial and Seah Steel
Can any of the company-specific risk be diversified away by investing in both KB Financial and Seah Steel 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 Seah Steel 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 Seah Steel Corp, you can compare the effects of market volatilities on KB Financial and Seah Steel 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 Seah Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Seah Steel.
Diversification Opportunities for KB Financial and Seah Steel
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 105560 and Seah is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Seah Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seah Steel Corp 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 Seah Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seah Steel Corp has no effect on the direction of KB Financial i.e., KB Financial and Seah Steel go up and down completely randomly.
Pair Corralation between KB Financial and Seah Steel
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.97 times more return on investment than Seah Steel. However, KB Financial Group is 1.03 times less risky than Seah Steel. It trades about 0.12 of its potential returns per unit of risk. Seah Steel Corp is currently generating about -0.01 per unit of risk. If you would invest 4,830,898 in KB Financial Group on August 25, 2024 and sell it today you would earn a total of 5,009,102 from holding KB Financial Group or generate 103.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Seah Steel Corp
Performance |
| Timeline |
| KB Financial Group |
| Seah Steel Corp |
KB Financial and Seah Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Seah Steel
The main advantage of trading using opposite KB Financial and Seah Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Seah Steel 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 Seah Steel will offset losses from the drop in Seah Steel's long position.| KB Financial vs. Sejong Telecom | KB Financial vs. Nice Information Telecommunication | KB Financial vs. Ssangyong Information Communication | KB Financial vs. SCI Information Service |
| Seah Steel vs. Moonbae Steel | Seah Steel vs. TK Chemical | Seah Steel vs. LG Chemicals | Seah Steel vs. Husteel |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |