Correlation Between KB Financial and EO Technics
Can any of the company-specific risk be diversified away by investing in both KB Financial and EO Technics 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 EO Technics 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 EO Technics Co, you can compare the effects of market volatilities on KB Financial and EO Technics 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 EO Technics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and EO Technics.
Diversification Opportunities for KB Financial and EO Technics
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between 105560 and 039030 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and EO Technics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EO Technics 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 EO Technics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EO Technics has no effect on the direction of KB Financial i.e., KB Financial and EO Technics go up and down completely randomly.
Pair Corralation between KB Financial and EO Technics
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.47 times more return on investment than EO Technics. However, KB Financial Group is 2.13 times less risky than EO Technics. It trades about -0.24 of its potential returns per unit of risk. EO Technics Co is currently generating about -0.19 per unit of risk. If you would invest 8,406,246 in KB Financial Group on December 8, 2024 and sell it today you would lose (636,246) from holding KB Financial Group or give up 7.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. EO Technics Co
Performance |
| Timeline |
| KB Financial Group |
| EO Technics |
KB Financial and EO Technics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and EO Technics
The main advantage of trading using opposite KB Financial and EO Technics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, EO Technics 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 EO Technics will offset losses from the drop in EO Technics' long position.| KB Financial vs. SM Entertainment Co | ||
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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