Correlation Between KB Financial and Youngbo Chemical
Can any of the company-specific risk be diversified away by investing in both KB Financial and Youngbo Chemical 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 Youngbo Chemical 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 Youngbo Chemical Co, you can compare the effects of market volatilities on KB Financial and Youngbo Chemical 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 Youngbo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Youngbo Chemical.
Diversification Opportunities for KB Financial and Youngbo Chemical
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 105560 and Youngbo is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Youngbo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngbo 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 Youngbo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngbo Chemical has no effect on the direction of KB Financial i.e., KB Financial and Youngbo Chemical go up and down completely randomly.
Pair Corralation between KB Financial and Youngbo Chemical
Assuming the 90 days trading horizon KB Financial is expected to generate 1.43 times less return on investment than Youngbo Chemical. But when comparing it to its historical volatility, KB Financial Group is 1.56 times less risky than Youngbo Chemical. It trades about 0.4 of its potential returns per unit of risk. Youngbo Chemical Co is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 356,000 in Youngbo Chemical Co on October 29, 2024 and sell it today you would earn a total of 37,000 from holding Youngbo Chemical Co or generate 10.39% 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. Youngbo Chemical Co
Performance |
| Timeline |
| KB Financial Group |
| Youngbo Chemical |
KB Financial and Youngbo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Youngbo Chemical
The main advantage of trading using opposite KB Financial and Youngbo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Youngbo Chemical 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 Youngbo Chemical will offset losses from the drop in Youngbo Chemical's long position.| KB Financial vs. Iljin Display | KB Financial vs. Korea Steel Co | KB Financial vs. Fine Besteel Co | KB Financial vs. Daesung Industrial Co |
| Youngbo Chemical vs. Hankukpackage Co | Youngbo Chemical vs. Woori Financial Group | Youngbo Chemical vs. Settlebank | Youngbo Chemical vs. KB Financial Group |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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