Correlation Between KB Financial and Kumho Petro
Can any of the company-specific risk be diversified away by investing in both KB Financial and Kumho Petro 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 Kumho Petro 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 Kumho Petro Chemical, you can compare the effects of market volatilities on KB Financial and Kumho Petro 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 Kumho Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Kumho Petro.
Diversification Opportunities for KB Financial and Kumho Petro
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 105560 and Kumho is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Kumho Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Petro Chemical 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 Kumho Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Petro Chemical has no effect on the direction of KB Financial i.e., KB Financial and Kumho Petro go up and down completely randomly.
Pair Corralation between KB Financial and Kumho Petro
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.93 times more return on investment than Kumho Petro. However, KB Financial Group is 1.08 times less risky than Kumho Petro. It trades about 0.17 of its potential returns per unit of risk. Kumho Petro Chemical is currently generating about -0.51 per unit of risk. If you would invest 9,070,000 in KB Financial Group on September 4, 2024 and sell it today you would earn a total of 570,000 from holding KB Financial Group or generate 6.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Kumho Petro Chemical
Performance |
| Timeline |
| KB Financial Group |
| Kumho Petro Chemical |
KB Financial and Kumho Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Kumho Petro
The main advantage of trading using opposite KB Financial and Kumho Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Kumho Petro 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 Kumho Petro will offset losses from the drop in Kumho Petro's long position.| KB Financial vs. Dongjin Semichem Co | KB Financial vs. AhnLab Inc | KB Financial vs. Posco ICT | KB Financial vs. CJ ENM |
| Kumho Petro vs. Sangsangin Investment Securities | Kumho Petro vs. NH Investment Securities | Kumho Petro vs. Daelim Trading Co | Kumho Petro vs. Dongwon Metal 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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