Correlation Between KB Financial and SK Telecom
Can any of the company-specific risk be diversified away by investing in both KB Financial and SK Telecom 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 SK Telecom 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 SK Telecom Co, you can compare the effects of market volatilities on KB Financial and SK Telecom 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 SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and SK Telecom.
Diversification Opportunities for KB Financial and SK Telecom
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 105560 and 017670 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom 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 SK Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Telecom has no effect on the direction of KB Financial i.e., KB Financial and SK Telecom go up and down completely randomly.
Pair Corralation between KB Financial and SK Telecom
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.2 times more return on investment than SK Telecom. However, KB Financial is 1.2 times more volatile than SK Telecom Co. It trades about 0.04 of its potential returns per unit of risk. SK Telecom Co is currently generating about -0.06 per unit of risk. If you would invest 8,700,000 in KB Financial Group on October 13, 2024 and sell it today you would earn a total of 80,000 from holding KB Financial Group or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. SK Telecom Co
Performance |
| Timeline |
| KB Financial Group |
| SK Telecom |
KB Financial and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and SK Telecom
The main advantage of trading using opposite KB Financial and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, SK Telecom 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 SK Telecom will offset losses from the drop in SK Telecom's long position.| KB Financial vs. Hotel Shilla Co | KB Financial vs. Shinsegae Food | KB Financial vs. Lotte Non Life Insurance | KB Financial vs. PLAYWITH |
| SK Telecom vs. Kukil Metal Co | SK Telecom vs. Daelim Industrial Co | SK Telecom vs. SV Investment | SK Telecom vs. Shinhan Inverse Silver |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |