Correlation Between KB Financial and HLB Power
Can any of the company-specific risk be diversified away by investing in both KB Financial and HLB Power 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 HLB Power 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 HLB Power Co, you can compare the effects of market volatilities on KB Financial and HLB Power 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 HLB Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and HLB Power.
Diversification Opportunities for KB Financial and HLB Power
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 105560 and HLB is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and HLB Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HLB Power 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 HLB Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HLB Power has no effect on the direction of KB Financial i.e., KB Financial and HLB Power go up and down completely randomly.
Pair Corralation between KB Financial and HLB Power
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.37 times more return on investment than HLB Power. However, KB Financial Group is 2.7 times less risky than HLB Power. It trades about 0.17 of its potential returns per unit of risk. HLB Power Co is currently generating about -0.23 per unit of risk. If you would invest 9,030,000 in KB Financial Group on September 1, 2024 and sell it today you would earn a total of 590,000 from holding KB Financial Group or generate 6.53% 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. HLB Power Co
Performance |
| Timeline |
| KB Financial Group |
| HLB Power |
KB Financial and HLB Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and HLB Power
The main advantage of trading using opposite KB Financial and HLB Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, HLB Power 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 HLB Power will offset losses from the drop in HLB Power's long position.| KB Financial vs. Korea Information Engineering | KB Financial vs. SCI Information Service | KB Financial vs. Atinum Investment Co | KB Financial vs. Samyung Trading Co |
| HLB Power vs. Korea New Network | HLB Power vs. ICD Co | HLB Power vs. DYPNF CoLtd | HLB Power vs. Busan Industrial 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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