Correlation Between KB Financial and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both KB Financial and Korea Alcohol 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 Korea Alcohol 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 Korea Alcohol Industrial, you can compare the effects of market volatilities on KB Financial and Korea Alcohol 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 Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Korea Alcohol.
Diversification Opportunities for KB Financial and Korea Alcohol
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 105560 and Korea is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol 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 Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of KB Financial i.e., KB Financial and Korea Alcohol go up and down completely randomly.
Pair Corralation between KB Financial and Korea Alcohol
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.37 times more return on investment than Korea Alcohol. However, KB Financial is 1.37 times more volatile than Korea Alcohol Industrial. It trades about 0.0 of its potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.13 per unit of risk. If you would invest 9,620,000 in KB Financial Group on August 29, 2024 and sell it today you would lose (20,000) from holding KB Financial Group or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Korea Alcohol Industrial
Performance |
| Timeline |
| KB Financial Group |
| Korea Alcohol Industrial |
KB Financial and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Korea Alcohol
The main advantage of trading using opposite KB Financial and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.| KB Financial vs. Korea New Network | KB Financial vs. Dong A Eltek | KB Financial vs. Dreamus Company | KB Financial vs. SK Bioscience Co |
| Korea Alcohol vs. Sungchang Autotech Co | Korea Alcohol vs. RFTech Co | Korea Alcohol vs. INFINITT Healthcare Co | Korea Alcohol vs. POSCO M TECH 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |