Correlation Between KB Financial and SK Holdings
Can any of the company-specific risk be diversified away by investing in both KB Financial and SK Holdings 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 SK Holdings 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 SK Holdings Co, you can compare the effects of market volatilities on KB Financial and SK Holdings 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 SK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and SK Holdings.
Diversification Opportunities for KB Financial and SK Holdings
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between 105560 and 034730 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and SK Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Holdings 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 SK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Holdings has no effect on the direction of KB Financial i.e., KB Financial and SK Holdings go up and down completely randomly.
Pair Corralation between KB Financial and SK Holdings
Assuming the 90 days trading horizon KB Financial Group is expected to under-perform the SK Holdings. In addition to that, KB Financial is 1.15 times more volatile than SK Holdings Co. It trades about -0.28 of its total potential returns per unit of risk. SK Holdings Co is currently generating about 0.02 per unit of volatility. If you would invest 14,810,000 in SK Holdings Co on November 27, 2024 and sell it today you would earn a total of 50,000 from holding SK Holdings Co or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. SK Holdings Co
Performance |
| Timeline |
| KB Financial Group |
| SK Holdings |
KB Financial and SK Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and SK Holdings
The main advantage of trading using opposite KB Financial and SK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, SK Holdings 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 SK Holdings will offset losses from the drop in SK Holdings' long position.| KB Financial vs. Digital Power Communications | KB Financial vs. Display Tech Co | KB Financial vs. ECSTELECOM Co | KB Financial vs. Iljin Display |
| SK Holdings vs. Duksan Hi Metal | SK Holdings vs. iNtRON Biotechnology | SK Holdings vs. Mgame Corp | SK Holdings vs. Cheryong Industrial CoLtd |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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