Correlation Between KB Financial and PLAYWITH
Can any of the company-specific risk be diversified away by investing in both KB Financial and PLAYWITH 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 PLAYWITH 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 PLAYWITH, you can compare the effects of market volatilities on KB Financial and PLAYWITH 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 PLAYWITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and PLAYWITH.
Diversification Opportunities for KB Financial and PLAYWITH
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 105560 and PLAYWITH is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and PLAYWITH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWITH 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 PLAYWITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWITH has no effect on the direction of KB Financial i.e., KB Financial and PLAYWITH go up and down completely randomly.
Pair Corralation between KB Financial and PLAYWITH
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.76 times more return on investment than PLAYWITH. However, KB Financial Group is 1.31 times less risky than PLAYWITH. It trades about 0.14 of its potential returns per unit of risk. PLAYWITH is currently generating about -0.3 per unit of risk. If you would invest 8,500,000 in KB Financial Group on October 14, 2024 and sell it today you would earn a total of 280,000 from holding KB Financial Group or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. PLAYWITH
Performance |
| Timeline |
| KB Financial Group |
| PLAYWITH |
KB Financial and PLAYWITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and PLAYWITH
The main advantage of trading using opposite KB Financial and PLAYWITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, PLAYWITH 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 PLAYWITH will offset losses from the drop in PLAYWITH'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 |
| PLAYWITH vs. Hankook Furniture Co | PLAYWITH vs. Green Cross Medical | PLAYWITH vs. Homecast CoLtd | PLAYWITH vs. DoubleU Games 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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