Correlation Between KB Financial and Daesung Private
Can any of the company-specific risk be diversified away by investing in both KB Financial and Daesung Private 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 Daesung Private 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 Daesung Private Equity, you can compare the effects of market volatilities on KB Financial and Daesung Private 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 Daesung Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Daesung Private.
Diversification Opportunities for KB Financial and Daesung Private
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 105560 and Daesung is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Daesung Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Private Equity 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 Daesung Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Private Equity has no effect on the direction of KB Financial i.e., KB Financial and Daesung Private go up and down completely randomly.
Pair Corralation between KB Financial and Daesung Private
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.52 times more return on investment than Daesung Private. However, KB Financial Group is 1.94 times less risky than Daesung Private. It trades about 0.45 of its potential returns per unit of risk. Daesung Private Equity is currently generating about -0.03 per unit of risk. If you would invest 8,340,000 in KB Financial Group on November 3, 2024 and sell it today you would earn a total of 830,000 from holding KB Financial Group or generate 9.95% 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. Daesung Private Equity
Performance |
| Timeline |
| KB Financial Group |
| Daesung Private Equity |
KB Financial and Daesung Private Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Daesung Private
The main advantage of trading using opposite KB Financial and Daesung Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Daesung Private 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 Daesung Private will offset losses from the drop in Daesung Private's long position.| KB Financial vs. Cloud Air CoLtd | KB Financial vs. Korea Investment Holdings | KB Financial vs. SBI Investment KOREA | KB Financial vs. Innowireless Co |
| Daesung Private vs. GS Retail Co | Daesung Private vs. Ssangyong Materials Corp | Daesung Private vs. Kolon Plastics | Daesung Private vs. Ecoplastic |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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