Correlation Between KB Financial and Iljin Display
Can any of the company-specific risk be diversified away by investing in both KB Financial and Iljin Display 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 Iljin Display 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 Iljin Display, you can compare the effects of market volatilities on KB Financial and Iljin Display 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 Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Iljin Display.
Diversification Opportunities for KB Financial and Iljin Display
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 105560 and Iljin is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display 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 Iljin Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iljin Display has no effect on the direction of KB Financial i.e., KB Financial and Iljin Display go up and down completely randomly.
Pair Corralation between KB Financial and Iljin Display
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.0 times more return on investment than Iljin Display. However, KB Financial Group is 1.0 times less risky than Iljin Display. It trades about 0.12 of its potential returns per unit of risk. Iljin Display is currently generating about -0.02 per unit of risk. If you would invest 5,899,179 in KB Financial Group on August 25, 2024 and sell it today you would earn a total of 3,940,821 from holding KB Financial Group or generate 66.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Iljin Display
Performance |
| Timeline |
| KB Financial Group |
| Iljin Display |
KB Financial and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Iljin Display
The main advantage of trading using opposite KB Financial and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Iljin Display 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 Iljin Display will offset losses from the drop in Iljin Display's long position.| KB Financial vs. Sejong Telecom | KB Financial vs. Nice Information Telecommunication | KB Financial vs. Ssangyong Information Communication | KB Financial vs. SCI Information Service |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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