Correlation Between KB Financial and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both KB Financial and Heungkuk Metaltech 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 Heungkuk Metaltech 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 Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on KB Financial and Heungkuk Metaltech 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 Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Heungkuk Metaltech.
Diversification Opportunities for KB Financial and Heungkuk Metaltech
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between 105560 and Heungkuk is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd 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 Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of KB Financial i.e., KB Financial and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between KB Financial and Heungkuk Metaltech
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.65 times more return on investment than Heungkuk Metaltech. However, KB Financial is 1.65 times more volatile than Heungkuk Metaltech CoLtd. It trades about 0.1 of its potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about -0.05 per unit of risk. If you would invest 4,519,403 in KB Financial Group on September 2, 2024 and sell it today you would earn a total of 5,100,597 from holding KB Financial Group or generate 112.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| KB Financial Group |
| Heungkuk Metaltech CoLtd |
KB Financial and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Heungkuk Metaltech
The main advantage of trading using opposite KB Financial and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.| KB Financial vs. SS TECH | KB Financial vs. Eagle Veterinary Technology | KB Financial vs. Chin Yang Chemical | KB Financial vs. Shinsung Delta Tech |
| Heungkuk Metaltech vs. Korea New Network | Heungkuk Metaltech vs. ICD Co | Heungkuk Metaltech vs. DYPNF CoLtd | Heungkuk Metaltech vs. Busan Industrial Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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