Correlation Between KB Financial and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both KB Financial and Kbi Metal 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 Kbi Metal 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 Kbi Metal Co, you can compare the effects of market volatilities on KB Financial and Kbi Metal 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 Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Kbi Metal.
Diversification Opportunities for KB Financial and Kbi Metal
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 105560 and Kbi is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal 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 Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of KB Financial i.e., KB Financial and Kbi Metal go up and down completely randomly.
Pair Corralation between KB Financial and Kbi Metal
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.48 times more return on investment than Kbi Metal. However, KB Financial Group is 2.07 times less risky than Kbi Metal. It trades about 0.08 of its potential returns per unit of risk. Kbi Metal Co is currently generating about 0.04 per unit of risk. If you would invest 4,751,124 in KB Financial Group on September 2, 2024 and sell it today you would earn a total of 4,868,876 from holding KB Financial Group or generate 102.48% 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. Kbi Metal Co
Performance |
Timeline |
KB Financial Group |
Kbi Metal |
KB Financial and Kbi Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KB Financial and Kbi Metal
The main advantage of trading using opposite KB Financial and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Kbi Metal 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 Kbi Metal will offset losses from the drop in Kbi Metal's long position.KB Financial vs. SS TECH | KB Financial vs. Eagle Veterinary Technology | KB Financial vs. Chin Yang Chemical | KB Financial vs. Shinsung Delta Tech |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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