Correlation Between KB Financial and Bosung Power
Can any of the company-specific risk be diversified away by investing in both KB Financial and Bosung Power 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 Bosung Power 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 Bosung Power Technology, you can compare the effects of market volatilities on KB Financial and Bosung Power 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 Bosung Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Bosung Power.
Diversification Opportunities for KB Financial and Bosung Power
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 105560 and Bosung is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Bosung Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosung Power Technology 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 Bosung Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosung Power Technology has no effect on the direction of KB Financial i.e., KB Financial and Bosung Power go up and down completely randomly.
Pair Corralation between KB Financial and Bosung Power
Assuming the 90 days trading horizon KB Financial is expected to generate 1.53 times less return on investment than Bosung Power. But when comparing it to its historical volatility, KB Financial Group is 2.14 times less risky than Bosung Power. It trades about 0.44 of its potential returns per unit of risk. Bosung Power Technology is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 260,500 in Bosung Power Technology on November 4, 2024 and sell it today you would earn a total of 37,500 from holding Bosung Power Technology or generate 14.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Bosung Power Technology
Performance |
| Timeline |
| KB Financial Group |
| Bosung Power Technology |
KB Financial and Bosung Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Bosung Power
The main advantage of trading using opposite KB Financial and Bosung Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Bosung Power 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 Bosung Power will offset losses from the drop in Bosung Power's long position.| KB Financial vs. Netmarble Games Corp | KB Financial vs. Korean Reinsurance Co | KB Financial vs. Dongbang Transport Logistics | KB Financial vs. LG Chemicals |
| Bosung Power vs. NH Investment Securities | Bosung Power vs. Samlip General Foods | Bosung Power vs. SBI Investment KOREA | Bosung Power vs. Golden Bridge Investment |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |