Correlation Between KB Financial and Myoung Shin
Can any of the company-specific risk be diversified away by investing in both KB Financial and Myoung Shin 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 Myoung Shin 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 Myoung Shin Industrial, you can compare the effects of market volatilities on KB Financial and Myoung Shin 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 Myoung Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Myoung Shin.
Diversification Opportunities for KB Financial and Myoung Shin
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 105560 and Myoung is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Myoung Shin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myoung Shin 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 Myoung Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myoung Shin Industrial has no effect on the direction of KB Financial i.e., KB Financial and Myoung Shin go up and down completely randomly.
Pair Corralation between KB Financial and Myoung Shin
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.43 times more return on investment than Myoung Shin. However, KB Financial Group is 2.33 times less risky than Myoung Shin. It trades about 0.17 of its potential returns per unit of risk. Myoung Shin Industrial is currently generating about -0.16 per unit of risk. If you would invest 9,030,000 in KB Financial Group on September 1, 2024 and sell it today you would earn a total of 590,000 from holding KB Financial Group or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Myoung Shin Industrial
Performance |
| Timeline |
| KB Financial Group |
| Myoung Shin Industrial |
KB Financial and Myoung Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Myoung Shin
The main advantage of trading using opposite KB Financial and Myoung Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Myoung Shin 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 Myoung Shin will offset losses from the drop in Myoung Shin's long position.| KB Financial vs. Korea Information Engineering | KB Financial vs. SCI Information Service | KB Financial vs. Atinum Investment Co | KB Financial vs. Samyung Trading Co |
| Myoung Shin vs. KB Financial Group | Myoung Shin vs. Dongbang Ship Machinery | Myoung Shin vs. Busan Industrial Co | Myoung Shin vs. Busan Ind |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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